CALGARY (CP) -- The U.S. is not overly concerned about expanding Chinese investment in the Canadian oilsands, potentially diverting production away from traditional North American markets, U.S. Treasury Secretary John Snow said Friday.
''Canada will, I'm sure, make a considered judgment...through its review process,'' said Snow following a whirlwind trip of the rapidly expanding oilsands in northern Alberta. ''So no, I'm not concerned.''
Chinese investment in the North American energy sector is a growing political issue in the United States currently as California-based Unocal Corp., faces a $18.5-billion takeover offer from state-owned CNOOC Ltd.
American politicians have warned that the $18.5 billion takeover bid announced last month could pose risks to U.S. national security, and called for a full review by the Bush administration.
In Canada, Chinese companies have begun making investments in the oilsands, where production is expected to triple over the next decade from its current daily output of one million barrels daily.
Earlier this spring, Canadian pipeline giant Enbridge Inc. [NYSE:ENB; TSX:ENB] announced that it had signed a preliminary deal with PetroChina [NYSE:PTR] to anchor a new, C$2.5 billion oilsands pipeline to the West Coast.
The deal, which earmarks half of the new pipeline's 400,000 barrels per day capacity, is the first major step in creating new export markets for oilsands crude other than the United States.
There have also been two relatively small investments in upstart oilsands companies by Chinese firms this year, with more and larger deals expected.
Earlier Friday, Snow visited northern Alberta's oilsands with Federal Finance Minister Ralph Goodale.
The visit proved to be eye-opening for Snow, who told the Fort McMurray Today that he was aware of the oilsands, but didn't realize how big their potential until he flew over major extracting operations and took a bus tour.
''I'm going to talk to . . . the president and vice-president about this trip and tell them about the huge potential that exists here,'' he said. ''I hadn't realized until these briefings I've had, just how vast these facilities are and what potential they have for the future.
''This is just a phenomenal natural resource asset and the United States and Canada are terrific allies,'' he continued.
''It goes directly to the issue of energy security and we in the United States are working to make ourselves more energy secure.''
The trip was part of a meeting between the two finance officials to discuss a number of issues. Snow and Goodale have in the past got together when the G8 leaders met, but decided last year that they should have an extended annual meeting.
''This is the first opportunity that we've had to do that,'' Goodale said.
''We hope to make this an annual event, rotating obviously from one country to the other. But (the visits are) an opportunity for us to make sure that the business and commercial relationships between Canada and the United States remain strong and successful both ways.''
Newly appointed U.S. Ambassador to Canada, David Wilkins, was also along for the tour, which included officials from all three of the major plants in the area: Suncor, Syncrude Canada and Albian Sands.
After the visit to Fort McMurray, Goodale and Snow were travelling back to Calgary for meetings.
(c) The Canadian Press 2005
