Non-Canadian corporations stake their claims to the resources
Alberta Federation of Labor
Friday, 22 April 2011
Foreign corporations, some controlled by national governments, have been using their economic clout to buy into Alberta's oil sands and take control of our natural resources.
U.S., French, British, Chinese, Thai, Korean and Norwegian interests have all bought stakes in oil-sands projects. According to the Canadian Association of Petroleum Producers (CAPP), international companies have invested nearly $20 billion in the last three years through mergers, partnerships and outright purchases of projects.
This increased foreign investment raises questions. Who has the right to develop our natural resources? Who sets the rules for how these resources are developed? Who controls where the resources are processed and sold?
One of the most recent major international investments came in November 2010, when Thailand's state-owned PTTEP bought a 40-per-cent stake in Statoil's Kai Kos Dehseh project for $2.3 billion. Statoil is a Norwegian company whose largest owner is the government of Norway, with 67 per cent of the shares. Under the terms of the deal, Statoil remained the majority owner and operator of the project, which ends up being a Norwegian-Thai, public-private enterprise developing Albertan energy resources.
In 2009, Korean National Oil Company took over Calgary's Harvest Energy Trust for $4.1 billion ($1.8 billion in cash and $2.3 billion in assumed debt). The deal allowed the Korean state-run company to grab an estimated oil production of 50,000 barrels per day (b/d) and 154 million barrels of oil-equivalent reserves. At that time, the Korean companies were reportedly looking to acquire about 300,000 b/d of production by 2012 to offset South Korea's dependence on foreign oil – 97 per cent of which was imported.
This wasn't the first time the Korean National Oil Company came to Alberta. In 2006, the Korean firm set up an office in Calgary and purchased the Black Gold Oil Sands leases near Conklin. These leases gave the company 10,000 b/d of bitumen for about 25 years.
China is now the world's largest consumer of energy. Perhaps not surprisingly, this energy-hungry nation has significantly increased its presence in the oil sands in the last two years. In 2009, PetroChina struck a deal to buy a 60-per-cent share of Athabasca Oil Sands Corp.'s MacKay River and Dover projects for $1.9 billion plus other financing arrangements. This gave PetroChina a majority share in a company with access to more than five million barrels of oil.
In April 2010, the Chinese company Sinopec, a majority-owned subsidiary of a national company, paid $4.65 billion for Houston-based ConocoPhillips' stake in Syncrude. What makes this deal significant is that under the terms of the deal, the state-controlled Sinopec has a veto on the critical decision of whether the company should upgrade bitumen here or export it in raw form overseas.
Questions around Sinopec's motives on bitumen processing – whether here in Alberta or overseas – were raised to a fever pitch in January this year when Enbridge announced the Chinese company's funding of the $5.5-billion Northern Gateway Pipeline. Though still in the early stages of development, the Northern Gateway Pipeline is designed to carry 525,000 barrels of diluted raw bitumen day from Alberta to a tanker port at Kitimat, B.C., where oil tankers would transport it overseas for upgrading and processing.
Most oil-sands producers are thought to be looking to upgrade and refine here or in the U.S., rather than ship raw bitumen overseas, and then sell their oil to whatever market that offers the most money. Sinopec's investment in the Northern Gateway Pipeline, however, is seen as a strategy to ship massive amounts of bitumen out of North America to Asia for upgrading, refining and finally consumption in mainland China.
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http://www.afl.org/index.php/May-2011/who-owns-our-oil-sands-foreign-corporations-stake-their-claims-to-our-resources.html
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