Two of China’s largest state-owned energy giants – CNOOC and Sinopec – have expressed interest to the federal government about investing in Canada’s potash sector and fertilizer production, government documents obtained by Postmedia News show.
The documents also reveal the Conservative government was aware for the past year, well before the recent controversy over foreign investment rules and the takeover bid for Nexen, that CNOOC was interested in co-operating “with other oil majors in investments in Canada.”
China was also looking for “early completion” of the Northern Gateway oilsands pipeline between Alberta and the B.C. coast currently under review by a federal panel.
As the Conservative government finalizes a new policy framework on foreign investment – and considers CNOOC’s $15.1-billion takeover bid for Calgary-based petroleum producer Nexen – it has been doing so knowing that major Chinese national oil and gas companies have been looking to invest in potash and fertilizer processing as well.
The Harper government has already blocked an attempted hostile takeover of Potash Corp. of Saskatchewan by Australian mining giant BHP Billiton.
It argued that crop nutrient potash was a strategic resource for Canada.
With that fresh in the minds of investors and the federal government, documents obtained by Postmedia News under access to information legislation show Chinese state-owned oil and gas companies such as China National Offshore Oil Corporation and Sinopec have told the federal government about their potential interest in investing in Canada’s potash sector and fertilizer processing.
The documents also show China already viewed Canada as a desirable place to invest and wanted an “early conclusion” of the recently signed Canada-China foreign investment promotion and protection agreement that is being hotly debated in the House of Commons.
Emails from Natural Resources Canada detailing Minister Joe Oliver’s trip late last year to China show he and senior officials met with the chairmen of CNOOC and Sinopec, who expressed their desire to possibly stake a claim in Canada’s potash sector and fertilizer production.
“Minister met with the chairman of (CNOOC), who was very positive on investment in Canada … He (the chairman) indicated that Canada is rich in resources and has a favourable investment environment, and noted that they may cooperate with other oil majors in investments in Canada,” says a November 2011 email from assistant deputy minister Stephen Lucas to Natural Resources Canada deputy minister Serge Dupont and other officials about the trip.
“CNOOC is actively looking at further projects in Canada, including potash given that CNOOC is a major player in China’s fertilizer market,” it said.
CNOOC’s goal is to be a top-tier integrated energy company (onshore and offshore), building on strengths in offshore and as leading LNG company in China. See partnership with Husky expanding in China, Canada and elsewhere,” the email continued.
The email also highlights a meeting during the China trip with the Sinopec chairman and Sinopec International CEO, where they identified they were keen on investing in Canadian natural gas and possible fertilizer processing with Canadian potash.
“Sinopec looking at LNG (liquefied natural gas) purchases for import to China as well as potential fertilizer processing in Canada using Canadian potash and natural gas,” says the email, which came in the midst of Sinopec purchasing Canadian oil and gas company Daylight Energy Ltd. for $2.2-billion.
Calls to the Canadian offices of CNOOC and Sinopec were not returned.
Saskatchewan is home to about one-third of the world’s potash production and about half of the world’s potash reserves.
Source: Calgary Herald Nov 2012