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Workers check the pipelines at a PetroChina oil field on the outskirts of Guang'an, Sichuan province, in this file photo.

REUTERS

China's state-controlled energy firms are struggling to turn a profit in Canada in part because of the federal government's immigration laws, a senior Chinese diplomat says.

Wang Xinping, China's consul general based in Calgary, said his country's energy companies want to bring in their own employees to reduce costs. But Ottawa has been stingy in issuing work permits, he said, making it harder for Chinese companies to develop their projects.

"Over all, for the Chinese investors, they are not making a profit," he said in an interview at the Chinese consulate.

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China sank $30-billion into Canada's energy sector between 2005 and 2012 snapping up assets. Mr. Wang concedes some of these projects are not as good as Sinopec Corp., CNOOC Ltd., and PetroChina Co. Ltd., once believed. With oil prices down 30 per cent since June, the companies want Ottawa to open the borders to help ease its troubles.

"It is very, very, difficult to get the necessary work permits for the operation and the running management of the Chinese enterprises invested here," Mr. Wang said. Alberta's market for technical experts like engineers and mid-level managers "is so expensive," he said, "and that adds to the financial burden of the companies."

Sinopec paid $4.65-billion (U.S.) to buy 9 per cent of Syncrude Canada Ltd. in 2010. A year later, it bought Calgary oil producer Daylight Energy Ltd. in a $2.1-billion deal. Despite spending billions, Ottawa has only granted Sinopec 15 working visas, according to Wenran Jiang, an expert on China and special adviser to the Alberta government's department of energy.

This number could not be verified because the federal department of Citizen and Immigration does not release such information, according to spokeswoman Sonia Lesage.

The department prohibits companies operating in Canada from hiring foreigners if there is a qualified Canadian able to the job.

"Work permit applications are considered on a case-by-case basis on the specific facts presented by the applicant in each case," she said.

China's request for immigration concessions come as it acknowledges it made some mistakes in its rush to buy assets in northern Alberta.

Nexen Inc.'s Long Lake oil sands project is well k1nown for its technological and geological troubles, and Syncrude has been underperforming for years.

"When you are making an acquisition, you suppose what you are getting is good," Mr. Wang said.

"When the situation is something like that, they think they had good assets. But sometimes – sometimes – they did not get what they thought they should get. That's also one of the difficulties the companies can have."

Mr. Wang declined to give an example.

"It is not a matter of [being] upset," he said.

"You just try to swallow the fruit. If it's sweet, it's good. If it's bitter, you have also to swallow."

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China remains concerned about regulations limiting its ability to invest in the energy patch. CNOOC's $15.1-billion (U.S.) takeover of Nexen in 2012 prompted Prime Minister Stephen Harper to clamp down on investments in Canada from certain state-owned enterprises. He effectively blocked these companies from owning entire oil sands projects.

Alberta officials are now urging their federal counterparts to revisit the restrictions, which have been blamed for the sharp drop-off in foreign investment in the province's energy sector.

China has long argued its state-controlled companies adhere to free-market principles rather than Beijing's demands.

"That's why I say the SOE restriction is not wise," Mr. Wang said. "It is not right."

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