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Hangingstone and McKay River projects to proceed

December 07, 2012

Two multi-billion dollar oil sands projects are moving forward by companies that are not listed among the top 50 energy companies in Canada.

The Globe and Mail published a list of the largest oil and natural gas producers in Canada, showing how much they produce of each commodity and whether the companies are domestically or foreign owned.

Strangely, two of the largest oilsands projects are being proposed by companies that are not on the list.

Each of these companies is interesting in its own right:


Today the Harper government OK-ed the proposed $15 B take-over of Nexen by CNOOC and the $ 5 B take-over of Progress Energy by Petronas. So $20 B will flow to mostly Canadian investors as part of these transactions. These proceeds will be in turn invested in the economy. Foreign companies making these take-overs expect to earn a return and will spends billions of dollars to do so. 

The Petro-China acquisition of the McKay River property provided Athabasca Oil Corp with the $2.6 B proceeds with which it is using to develop Hangingstone and Dover West.  Petro-China itself will be investing several billions of dollars in the McKay River project.

It is significant that large capital inflows are coming from Chinese state-owed enterprises that are funding oil sands projects. It is also significant that these investment dollars are coming from companies that were here-to-for not even on the radar.