By OGJ editors
HOUSTON, Jan. 18 -- Canadian oil executives and investment bankers expect the US and China to be the most active sources of foreign investment this year in Canadian oil and gas assets, particularly oil sands, according to a survey released by Blake, Cassels & Graydon LLP.
The report, Canadian Oil and Gas Insight, involved telephone interviews of 38 executives and 16 investment bankers during September and October 2005. The poll was conducted by Mergermarket on behalf of the Calgary law firm.
Executives and investment bankers expect the US to be the most active source of investment in Canadian oil and gas.
"Interestingly, 46% of corporate respondents and 33% of investment bankers surveyed believe that Chinese companies will be the most active of investors [outside North America] in our energy sector in 2006," the report said.
When asked specifically about oil sands, both groups of respondents said they believe China and the US will be the leading geographic origins of investment in Canada this year.
"Given that the deals in which Chinese corporations participated in 2005 were directly or indirectly related to oil sands, not surprisingly an overwhelming 70% of bankers believe that China will be the second most active, while half of the bankers believe the US will be the first most active," the report said.
Chinese companies have shown an interest in Canadian oil sands. Sinopec Group paid $105 million for a 40% interest in Synenco Energy Inc.'s proposed $4.5 billion Northern Lights project (OGJ, Apr. 25, 2005, p. 20).
CNOOC paid $122 million for a 16.69% share of private MEG Energy Corp., which plans a 3,000 b/d steam-assisted gravity drainage pilot and a 22,000 b/d commercial SAGD project at Christina Lake project near Fort McMurray, Alta.(OGJ Online, Apr. 13, 2005).
Neither the executives nor the investment bankers expect investors from the Middle East or Russia to actively invest in Canadian oil and gas.
Asked which segment would generate the most mergers and acquisitions, 41% of respondents listed oil sands. Forty percent of respondents said the upstream conventional segment would see the most M&A transactions, and 3% said the downstream segment would be the most active.
