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China’s state-owned companies are still keen to invest in Canada’s energy sector, but worry about the slow pace of infrastructure development to connect Western oil and gas producers with Asian markets, Natural Resources Minister Joe Oliver says.
Mr. Oliver returned last week from visits to South Korea and China amid concerns that Ottawa’s rules for state-owned enterprises (SOEs) have sent negative and confusing signals to Asia’s government-controlled companies whose investment is needed to finance development in the country’s resource sector.
He met with Korean and Japanese executives attending an energy conference in South Korea, and with Chinese investors as well as President Xi Jinping and Premier Li Keqiang in Beijing.
“I didn’t encounter any confusion about the rules; I wasn’t asked for clarity,” Mr. Oliver said, although some Chinese investors indicated they weren’t happy with the rules. “Nobody said to me directly or indirectly that the decline in SOE investment [in the Canadian energy sector] was the result of those rules …
“I certainly got no sense from anybody that they are turned off the prospect of investing in the Canadian industry,” Mr. Oliver said in an interview.
Last December, the federal government brought in new regulations under the Investment Canada Act that prohibits SOEs from acquiring majority stakes in oil-sands companies, and raised the bar for assessing their other acquisitions in the oil and gas sector.
In a speech earlier this month, former Conservative industry minister Jim Prentice, now deputy chairman at CIBC, said the new rules have created confusion among would-be SOE investors.
The new rules have sent a signal to prospective SOE investors that they are not welcome in Canada, Mr. Prentice said. As a result, investment by SOEs in oil and gas has essentially stopped, after totalling $33-billion between 2005 and 2012.
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