Tag: Nexen

CNOOC-Nexen deal makes “absolutely no sense” Cullen says, fears Beijing will dictate Canadian resource policy

Skeena Bulkley Valley MP and NDP House leader says the Harper government’s approval of the takeover by CNOOC, the China National Offshore Oil Corporation of the Alberta-based energy company, Nexen Inc.  makes “absolutely no sense.” Cullen also told northwest reporters in an end-of-year news conference that if the Conservatives continue their present policies, “Beijing will be directing Canadian energy policy and what we do with natural resources.”

Cullen said the approval of the CNOOC Nexen deal was a major development: “The other big news was the reluctant, but enthusiastic approval of the CNOOC Nexen deal; this is the purchase of by the Chinese state-owned company CNOOC. Nexen [is] the 12th largest group in the oil sands, which is also meant to be the source for the Northern Gateway pipeline.

“Stop if anyone thinks this is a coordinated conspiracy to turn the oil sands into an entirely Chinese government owned project.

“[It is] very, very unpopular in Canada, very unpopular in Alberta and the government did this very strange thing where they approved the deal and then said never again because the net benefit test is not being met and that it’s bad for Canada but this deal can go ahead.

“It makes absolutey no sense whatsoever. This combined with the agreement with China, the Foreign Investment Protection Agreement, it now allows the Chinese government to buy up as many oil sands leases as they want. This will very much put a chill on any government in Canada, provincial or federal from introducing laws that hurt Chinese interests because we are now open to lawsuits.”

Cullen was also asked about the PetroChina’s purchase of a stake in the Browse LNG project in Australia. (Cullen’s news conference took place before the announcement that PetroChina had bought into an Encana project as well) and the prospect for LNG projects at Kitimat and Prince Rupert.

“I don’t think the market has the capacity for all of these projects to go ahead and that’s coming from people who know a lot more about LNG shipping than I do.

“I don’t think we have the carrying capacity in the northwest for all of them to go ahead. It will be the first two or three through the gate that will be successful and I think there’s some concern from folks when they look at the whole sweep of projects being proposed what the total shipping traffic would be and what the impact would be just in general. I can see people’s hesitation.

“We’ve been trying to work with those companies so they are out and meeting with the communities. Like any industry there are some companies that are quite open and good at consulting and actually accommodating peoples’ concerns. There are others are not so good. So we’ve been trying to encourage everyone to get to the gold standard and know that they need a social licence to operate in the northwest and if they don’t ahve it, it’s very difficult for the project to get off the ground.

Wild, wild west

“When we don’t have good laws in Canada talking about saying what foreign state control over our natural resources can and can’t be, it’s the wild, wild west. So as this thing goes along, the concerns will become more and more clear that the interests being served will not be Canadian.

“To give the Chinese credit, they’re absolutely up front and explicit about this. To the Conservative government’s complete shame, they don’t seem to care. Beijing will be directing Canadian energy policy and what we do with natural resources.

“All of this to win the government a little bit of favour with the Chinese is just maddening to me.

“Again I recall the old line the Conservatives used to use in elections ‘we’re going to stand up for Canada.’ Wow, did that ever turnout to be an outright lie.

So it’s frustrating and its very worrisome. This isn’t a right-left thing, I’m hearing from a lot of conservative commentators and folks back in the northwest who are very strong supporters of Conservative politics that this not their kind of conservative government, they don’t even recognize it any more.

“This happens to prime ministers from time to time. They get sucked in to the lobbyists and the global circuit and really start to lose touch with what Canadian values are. I think, unfortunately that’s what happened to our prime minister.

Related Links

Nexen news release

Norton Rose law firm guidelines for State Owned Enterprises in Canada

Five energy companies reveal backing for Northern Gateway pipeline

Five major energy companies have filed documents with the Northern Gateway Joint Review Panel saying they are backing the pipeline project in one way or another

Cenovus Energy Inc., which runs the condensate operation at the old Methanex site in Kitimat and MEG are funding participants, that is they are investing in the pipeline.

MEG and Cenovus have also signed a precedent agreement, meaning that the company will transport diluted bitumen along the pipeline. Other companies signing the precedent agreement are Suncor Energy, Nexen Inc., and Total E&P Canada.

The Chinese state oil company Sinopec announced earlier it was one of the pipeline funding participants.

In October, Enbreige spokesman Paul Stanway said that ten companies have contributed $10 million each to help Enbridge finance the regulatory approval process, meaning that four backers remain to be revealed.

This is likely to happen before the hearings open at the Haisla Recreation Centre, at Kitamaat Village, on Tuesday January 10.

Giant Japanese energy consortium buys into BC shale gas

Energy

A large Japanese consortium lead by Inpex Corporation has agreed to buy  a 40 per cent stake in shale gas assets owned by Calgary-based Nexen, an energy exploration company.

A Nexen news release calls the deal “a strategic partnership.”  The deal is worth $700 million and covers the development of shale gas deposits in the Horn River, Cordova and Liard basins in northeast BC

Inpex is a partner with Shell in an Indonesian liquified natural gas project. Shell recently purchased the old Methanex site and marine terminal in Kitimat.

Nexen will continue to manage operations at the deposits.
 

The news release quotes Marvin Romanow, Nexen’s President and Chief Executive Officer, as saying :”This joint venture represents a significant milestone in the advancement of our shale gas strategy and the premium over our invested cost shows the value we have created in a short time. The transaction provides us with world-class partners that have significant upstream and LNG expertise. It also recognizes the outstanding team we have put in place and the execution excellence they have consistently demonstrated.”

The Nexen release goes on to say:

Inpex currently conducts 71 oil and gas projects in 26 countries, making them Japan’s largest oil and gas exploration and production company. They are engaged in exploration, development and production activities around the globe with production of over 400,000 boe/d and have the largest oil and gas reserves and production volume of any Japanese E&P company.

Inpex brings significant LNG expertise and market access to the partnership. They own interests in large LNG projects including resource in both Indonesia and Australia and are building a regasification terminal in Japan. Inpex holds a 76% working interest in the Ichthys LNG project offshore Australia and is the operator. The project is expected to deliver LNG production volumes of 8.4 million tonnes per year. Inpex holds a 60% working interest in the Abadi LNG project offshore eastern Indonesia and is the operator (in July 2011, Inpex signed an agreement with Shell for transfer of a 30% participating interest. This transaction is subject to certain conditions). The project is expected to deliver LNG production volumes of 2.5 million tonnes per year. The production volume from these two projects is equivalent to 15% or more of Japan’s current LNG annual import volumes.

Energy industry tweeters are already speculating that the natural gas will likely be exported through Kitimat.

Is energy player Nexen Kitimat’s next “gentleman caller?”

Another big energy company is looking for a way to get its shale gas from northeastern British Columbia to the lucrative markets of East Asia.

At Monday’s Canadian Petroleum Producer’s investor conference in Calgary, Nexen announced it was looking for a joint venture partner to export the shale gas through a west coast port to Asia.

Nexen wants to find a partner with expertise in producing and selling liquefied natural gas, said Marvin Romanow, chief executive officer. The Calgary-based company last month opened the books on its shale-gas resources for review by interested parties.
“We looked for folks with good contacts in LNG,” Romanow said

Canadian Press reported:

 

Nexen Inc. (TSX:NXY) is on the hunt for a partner to help develop its vast holdings in the Horn River Basin. LNG expertise would be attractive in a partner, but Nexen is open to a variety of marketing strategies for its gas, chief executive Marvin Romanow said.
“I think you want to think about treating your market access as a portfolio, not as a single killer strategy.”

So it is likely that Nexen and its prospective partners, whether from Asia or North America, will be next in line of “gentleman callers” making their way to Kitimat to check out Douglas Channel. 

To use a theatrical and old movie analogy for a moment, Kitimat,  with its isolated location and the devastating closure by West Fraser of the Eurocan plant, up until this spring, the town was seeking big money corporate saviours in the same way as Tennessee Williams’ stricken, lonely Laura pined for a “gentleman caller” in The Glass Menagerie. 
Now with the world wide gold rush in shale gas production aimed at the Asian market, Kitimat seems to be taking on a new movie role, the nice, plain, intelligent next-door girl that all the boys ignored until she suddenly comes in to an unexpected inheritance. Now all the boys are calling on her and so  are fancy guys from out of town. 386-Nexenshale_June2011.jpg
 Nexen is a Calgary-based energy company, first known as Canadian Occidental Petroleum. It began with operations in the Alberta oil patch and later in the Gulf of Mexico.
In 1991, the company made a major oil discovery in Yemen and that financed later expansion into the Alberta oil sands,  deep water drilling the Gulf of Mexico and exploration in northeastern British Columbia shale oil.
At the  Calgary conference, Nexen said it wasn’t currently drilling any new wells in Yemen and was slowing maintenance of wells while it waits renewal of its contract with the government. Given the current unrest in Yemen, it may be a while before a new government is formed that can sign a new 50/50 contract with Nexen.
On shale gas, Nexen says on its website:

While we weren’t looking at shale gas five years ago, today we have captured significant resource potential-enough to double our current proved reserves-in the heart of one of North America’s best shale gas plays. We are improving productivity and driving down costs as we improve equipment utilization, drill longer wells and initiate more fracs per well.
Shale gas can be brought on quickly, fuels our short-term growth and complements the larger projects in our portfolio.

Webcasts from the CAPP conference

PDF of Nexen’s Powerpoint presentation. (On the Nexen investor page, lower right)