As the energy industry in Canada is struggling to control oil prices, experts and connoisseurs suggest emerging business opportunities for investment, but warned Chinese investors to keep their horses. Large oil and gas companies in Canada begin to report quarterly financial results this week, the sources in Alberta say could trigger further budget cuts and possibly a new wave of layoffs even when oil prices rise from lows several years since last summer.
"Volatility is hard to read as to where the bottom is," said Bruce Edgelow, vice president of energy with ATB Financial. "People want to have a sense that the market is going, we hate to be caught by surprise."
The major oil producers like Nexen ended depreciation of assets and job cuts, two years after China's CNOOC completed the purchase of $ 15.1 billion, the largest number outside the country at that time. But Edgelow says that the rate of return on a declining market should not prevent long-term Chinese investment in Canada's oil sands strategy.
"Chinese investors are no different from what we are as long-term investors. While the short-term price may affect the current view or appetite to do more, but we are investing for the long term," he told Xinhua Edgelow in Calgary in a recent interview.
After CNOOC acquired a bloated work force Nexen, insiders say that the integration of the two companies has not gone well.
CNOOC why spent so much money on taking control, not ownership, but the team is "When the team set becomes a burden, why not build a new team for that matter?" Mason said Wei, president of Petroleum SinoSky. "
Investment experts believe that it takes time to consolidate after mergers in terms of employees, structure and culture of the company. "A maximum of 10 years is required to judge an investment. When oil prices are rising, the Chinese projects here in Alberta are paying," said Derek Zhao ATB Financial.
Canadian oil sands, mostly in the western province of Alberta, has proven reserves of around 170 billion barrels, the world's third largest after Saudi Arabia and Venezuela reserves. Known as the Energy Capital of Calgary it houses the headquarters of almost all major domestic and foreign oil companies. In the last 15 years it has seen a booming capital inflows worldwide, including Chinese state CNOOC, CNPC and Sinopec.
Since January 2015, China had a total investment of $ 53 million in Canada, 78 percent are in the energy sector, according to statistics from the China Institute at the University of Alberta in Edmonton, which launched a line Canada Investment Tracker China in November 2014, as part of its project to study Chinese investment in Canada.
Industry sources say China's capital and resources in Canada are a perfect match. In a move to seek more investment to the province which is facing a liquidity crisis up to 7 billion Canadian dollars, Alberta Premier Jim Prentice is set to visit China in late May.
Some cutting-edge technologies developed by Chinese companies may help alleviate criticism against "dirty oil" by environmental groups. But analysts warn against the risks in taking advantage of high-cost oil sands, which involves environmental problems, restricting policies, design of piping system and local labor.
Immediately after the CNOOC-Nexen deal, Canadian Prime Minister Stephen Harper announced a decision consistent: there would be no new rules that prevent any more state-owned enterprise (SOE) for the purchase of majority stakes in the oil sands.
"If it is for the government to review and decide the proposals should be the criteria for defining what is state-owned and what is not, but never made public," said Jia Wang, deputy director of the China Institute. "The restriction is only in the oil sands, yet not in other industries."
On the front of the line, US President Barack Obama has vetoed the proposed Keystone XL pipeline that carries oil from Alberta south to the heart of America, while persistent Pipelines Enbridge Northern Gateway has been criticized for Native groups citing concerns over the expansion of oil sands, which if completed would link Alberta to the terminal west of the shoreline in Kitimat for transport to Asian markets by tankers. Sources say that the United States is reluctant to see closer connection energy between Canada and China.
For now, Chinese companies, along with some global players like Total, Statoil and Devon Energy are trapped in the mud of bitumen, and sources reveal that some are planning for retirement. When companies are racing to the rapid acquisition, might overlook some of the risks, Yongzhu said Zhang, a senior engineer of Petro-Canada.
"It is advisory for Chinese companies going global for finding a local strategic partner to establish a joint venture, rather than the full takeover," Zhang said. "On one hand, yields may have to divide, but on the other, a lot of trouble can be saved, because the local partner knows better deal with stakeholders and governments."
Preparing for a reorganization emerging scenario, experts warn of Chinese investment investors to wait and see. "You can expect, but investors may want to take a development plan for at least three years," said Li Yinghua, a senior investment between China and Canada. "They may have to prepare for a bleak market for as low as $ 50 per barrel, and may also have several options when oil prices rebound to 100."