Chinese state-owned oil firm Sinopec confirms interest in Alberta oil sands
TORONTO (CP) - A major Chinese state-owned oil and gas company confirmed Monday it is interested in investing in Alberta's oilsands, as the world's most populous country seeks energy sources to fuel its growing economy.
A vice-president of Sinopec International Petroleum Exploration and Production Corp. said in a speech Monday evening that Chinese investment in Canada would be good for both countries. Sinopec vice-president Qiu Xianghua Xianghua said at the annual meeting of the Canada-China Business Council in Toronto that China has 21 per cent of the world's population but the country only has 1.8 per cent of the world's oil supply.
"China therefore cannot develop its country relying on its own resources," Xianghua said in his speech, ahead of an evening keynote address by Prime Minister Paul Martin.
A copy Martin's speech, obtained before he addressed the audience, said acknowledged that Canadian resource companies will be attractive to China and other Asian countries.
"In determining whether acquisitions of this nature will be welcomed in Canada, we will be guided by the imperative of ensuring that they are of significant benefit to Canada both domestically and in terms of our international economic reach," the prepared text of Martin's speech said.
Xianghua pointed out that Canada's oilsands region is reported to have the world's second-biggest oil reserve, after Saudi Arabia, and that the high price of oil and recent technological developments make investing there worthwhile for China.
The oilsands are "remarkable resources and we are currently investigating them," he said.
"China needs oil resources and has a big market," Xianghua said. "Canada needs a market, so to invest in Canada would be mutually beneficial and complementary to both countries."
Xianghua did not specify whether his company - the second-largest oil and gas firm in China, with 2003 revenues of $56 billion US - would attempt to buy a Canadian company or form a joint venture.
He refused to take questions from the media.
Xianghua's confirmation of Sinopec's interest in the Canadian oilpatch came two weeks after an unconfirmed report that a Chinese company is looking to buy Calgary-based Husky Energy, which is controlled by Hong Kong businessman Li Kashing.
A vice-president of a China Minmetals subsidiary, which is in talks to take over Canadian mining giant Noranda Inc. for about $6 billion Cdn, was less forthcoming about his company's plans but also noted Canada's complementary interests.
"There should be an obvious and logical bridge between resource-rich Canada and the resource market in China," said Feng Xu, vice-president of China Minmetals Nonferous Metals Inc., who also would not answer media questions.
"Canada is one of the countries of stable economic growth and a traditional trading country of our company," Xu said. "We firmly believe our cooperation in mining and metals areas will grow and progress due to our complementary economies and our shared view of mutual benefit."
Xu gave no details on the Noranda bid, which was thrown into question last month when exclusive talks between Minmetals and Noranda broke off.
© The Canadian Press, 2004