Sunshine Oil Sands of Calgary has announced that it has entered
into a "co-operation deal" with a subsidiary of
state-owned China National Offshore Oil Corp. The
two companies have agreed that they will "amicably
negotiate and communicate with each other in respect of cooperation
in developing multiple thermal fluid oilsands exploration
technology in Canada and, if acceptable, sign a cooperation
agreement under which COSL will conduct thermal fluid tests within
the oilsands areas of the Company in order to confirm the
feasibility of multiple thermal fluid techniques and other relevant
technologies with respect to oilsands exploration."
When the new State Owned Enterprises guidelines were
announced late last year,
it was suggested that the result desired by the federal
government would be an increase in the number of joint
A potential consequence of these revisions will be an increased
appetite for joint ventures between Canadian and foreign entities,
including SOEs. A joint venture structure may allow SOEs to invest
in Canadian industry without engaging the new SOE Guidelines, which
is of particular interest in the context of the amendments
targeting foreign acquisitions in the Canadian oil sands. Joint
ventures enable foreign enterprises to benefit from the experience
of long-time oilpatch operators and open the door to a more diverse
set of partners.
Sunshine Oil Sands has been very successful at
assembling oil sands leases and has significant
leases and reserves in the Athabasca oil sands region,
but it has not yet produced any bitumen. It is not known
whether, in the absence of the new SOE guidelines, CNOOC would have
sought to purchase Sunshine rather than entering into this sort of
arrangement. Nevertheless, this would seem to be the very
sort of joint venture transaction that both the Prime Minister and
the Natural Resources Minister intended
would be the basis for future foreign SOE investment in the oil
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