China’s $37 billion bet on Canadian energy producers, from Sunshine Oilsands Ltd. to Penn West Petroleum Ltd., is producing disappointing results amid sinking resource prices and operational breakdowns.
The Chinese economy is only just coming to scale and will have $1 trillion to $2 trillion to invest abroad over the next five to 10 years according to some estimates, said Wenran Jiang, director of the Canada-China Energy & Environment Forum.
Prime Minister Stephen Harper is gaining support among Canadians for his plan to ship oilsands crude to China after President Barack Obama rejected TransCanada Corp.’s $7 billion Keystone XL pipeline to the U.S. Gulf Coast.
Canada’s review of Cnooc Ltd.’s $15.1 billion bid for Nexen Inc. is a “litmus test” for Canada’s willingness to accept Chinese investment, said Howard Balloch, 61, chairman of the Asian division of investment bank Canaccord Genuity Corp.
The Canadian review of Cnooc Ltd.’s $15.1 billion bid for Nexen Inc. triggered calls for simpler foreign-investment rules as government-controlled Chinese companies account for a rising share of Asian takeovers.