Updates
September 1, 2012: Is Kuwait buying a piece of the Athabasca?
Original Post
I won't ever be able to find my post, but some time ago I joked that China would someday buy the entire Bakken.Maybe that joke wasn't too far off base.
But this is a bigger story, a much bigger story, for a different reason, and I haven't seen anyone else talk about it yet.
Today, from Oil & Gas Journal:
PetroChina snaps up remainder of AOSC's MacKay River project
China’s state-owned PetroChina will be 100% owner of Athabasca Oil Sands Corp.’s MacKay River project at a total price of $2.5 billion (Can.) after paying a further $680 million (Can.) for the remaining 40% of the firm’s shares.
AOSC said it exercised an option to sell its interest in the MacKay River project in Alberta to PetroChina, which in late 2009 bought a 60% stake for $1.9 billion (Can.) (OGJ, Sept. 7, 2009, Newsletter).
Production from the development is slated to start in 2014, with an initial capacity of 35,000 b/d, eventually rising to a top-end output of 150,000 b/d. Canada’s government last month gave its stamp of approval for the start of construction.
PetroChina’s purchase of the MacKay River shares marks the third investment by a Chinese state-owned firm into oil sands projects in Canada, the largest being the $4.65 billion (Can.) paid in 2010 by China Petrochemical Corp. for a 9% stake in Syncrude.
Canada’s regulators do not need to approve the sale nor is it likely they would anyway. Canada’s government and petroleum industry have been frustrated by repeated delays by the US government in approving the Keystone XL pipeline project.
That delay by the US—which is Canada’s only major oil export market—has brought a rethink in Ottawa. Indeed, the Canadians now believe that there best interest lies in diversifying its oil exports to other markets.
Slowly we are selling our country to China. They are big investors in the Eagle Ford Shale oil play in South Texas. We keep borrowing money from them because we can't stop spending. What kind of sad future is it going to leave for our children and grandchildren?
ReplyDeleteThe Chinese influence will occur much sooner than that. It is very, very possible that the Canadians could sell their oil to China, rather than the US.
ReplyDeleteHistorically, the Canadians have had a very close relationship with the Chinese.
On can argue that in the big scheme of things, it may not matter. Operators will sell their oil to the highest bidder.
However, if there is a shortage of a commodity (or a perceived shortage), a Chinese operator is more likely to favor China in the first place, even if US was willing to pay more.
If the US doesn't approve the keystone pipeline it would be the worst decision it has made. The enviromentalists need to wake up. Wind towers kill thousands of birds every year. I am for green energy but without incentives alot of the programs don't work on paper. China is laughing at us. I am very disappointed in our leadership...
ReplyDeleteExcept possibly for off-shore turbines in non-migratory pathways, there is no rationale for wind turbines, and even those are highly questionable with very inexpensive, clean natural gas.
ReplyDeleteWith regard to the Keystone XL: not to worry. Enbridge and others are making up the difference, and there will be excess capacity even without the Keystone. If the Keystone XL is never allowed to cross the border, the oil will be moved to the Canadian west coast. Oil is fungible. Once at the west coast, tankers will take it anywhere, including China and somewhere in the lower 48.
But I wouldn't worry about the Keystone from a practical point of view. From a political decision-making point of view, it is very, very troubling.
And, yes, the Chinese are laughing at us. And they are snapping up our reserves and technology at great prices.