As energy-focused companies, firms and state-owned entities
continue to eye international energy industry opportunities,
McCarthy Tétrault is pleased to provide a brief Oil &
Gas Industry Update highlighting recent Canadian market activity
and trends including:
increased M&A activity in Alberta's oil sands, led by
Canadian companies considering HKEX for oil & gas stock
shale gas is a bright spot in the weak natural gas sector.
Recent Deal Activity
In Canada, we have been experiencing a marked increase in
M&A activity, both with Canadian-based majors and with deals
involving international independents and state-owned companies:
Suncor / Petro-Canada (Domestic)
$19 billion CAD
Precision Drilling Trust / Grey Wolf Inc. / Korea National Oil
Corp. (KNOC) [Announced]
$6.5 billion CAD
Sinopec / Addax Petroleum
$4.6 billion CAD
Nova Chemicals Corp. / International Petroleum Investment
Company (Abu Dhabi)
$2.3 billion CAD
*Petrobank / Tristar (Domestic)
$2.2 billion CAD
PetroChina / Athabasca Oil Sands Corp.
$1.9 billion CAD
*Heritage Oil's sale of Ugandan assets [Announced]
$1.5 billion CAD
*Crescent Point / Shelter Bay [Announced]
$1.2 billion CAD
Penn West / China Investment Corporation $
800 million CAD
Verenex Energy Inc. / *Libyan Investment Authority
$350 million CAD
Total SA / UTS
Kitimat LNG project
*Husky Energy / South China assets spin-off [Announced]
*McCarthy Tétrault client
McCarthy Tétrault's Oil & Gas Group observes the
following industry challenges, opportunities, and trends through
the balance of 2010:
Focus on Asia - Inbound and Outbound
International investment interest in Alberta oil sands
continues, particularly from Asia (e.g., Penn West/CIC
deal; PetroChina deal; India; Koreans — KNOC/Harvest
Widespread view in Alberta that supply/demand equation will
result in a longer-term rebound, supported by reserve and output
indicators (e.g., Mexico oil output at lowest since 1995,
according to Reuters).
Canada's Kitimat LNG Project — exporting LNG to
Asia; promising recent advancement with suppliers and
Some Canadian oil & gas companies (such as McCarthy
Tétrault client Sunshine Oilsands) are eyeing HKEX listings
vs.TSX or NYSE listings — we speculate this may be a
Domestic Activity – Canada
Higher oil prices, combined with continuing high international
interest in Alberta oil sands, have sparked a new acquisition
Majors and joint ventures - CNRL, Cenovus Energy, Husky/BP,
ConocoPhillips/Total, Suncor Energy, and Imperial/Exxon - saw
project restarts in 2010, ranging from $900 million to $8
Natural gas remains weak; one "sweet spot" is shale
gas in both Canada and the US - tremendous opportunity.
Gas prices low; could mirror 2002 and present investor
opportunities; some key analysts are predicting mid-term
Environmental – Area to Watch
While new environmental legislation has not yet substantially
impacted E&Ps in Canada, we are watching the outcomes of the
the current $2 billion in Alberta provincial funding to guide
carbon capture and storage projects;
the US approach to energy policy, climate change policy, and
new technology investment;
Canadian companies' analyses of the implications of
California's new fuel standard in relation to the oil sands;
the potential North America-wide approach to emission reduction
targets; this philosophy has support in Canada.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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