Cap on Foreign Investments in Oil Sands will Lead to Increased M&A Activities in Canada’s Gas Assets
On December 7, 2012, the Canadian government announced new foreign investment guidelines to restrict foreign State-Owned Enterprises’ (SOEs’) level of control in Canadian oil sands companies. This announcement appears to be a fall-out from the recent major acquisitions by Chinese SOEs in Canada’s oil sands, which have accounted for around 80% of the investments in Canadian oil sands companies since January 2012. However, the new guidelines continue to permit foreign investment by SOEs that have controlling powers for the development of shale gas and LNG projects, considering the fact that it is in an earlier stage of development than oil sands. Taking new LNG suppliers targeting Asia into account, Canada needs to ensure investments in its gas sector to feed its planned LNG plants. With new guidelines on foreign investment on SOEs not affecting the gas industry, Canada may witness an increase in M&A.
The viewpoint explains how cap on foreign investments in oil sands will lead to increased M&A activity in Canada’s gas assets.
The viewpoint also covers how Canada needs to ensure investments in its gas sector to feed its planned LNG plants considering competition from other new LNG suppliers targeting Asia.
Geographic Scope- Canada.
Reasons to buy
To know about how Canada’s new investment guidelines restrict major foreign SOE investments in its oil sands industry.
To understand about the Chinese SOEs as major investors in Canadian oil sands assets since January 2012.
To know about new guidelines which are likely to redirect foreign investments in Canada’s gas sector.