Canada’s Encana, PetroChina scrap planned $5.5bn shale gas venture

21 June 2011 16:19  [Source: ICIS news]

TORONTO (ICIS)--Canadian energy firm Encana has ended talks with PetroChina on a planned $5.5bn (€3.9bn) shale gas joint venture in western Canada, it said on Tuesday.

Encana said it could not agree with Chinese state-owned oil refiner PetroChina on “key elements of the proposed transaction”.

The companies had announced in February that PetroChina was to take a 50% stake in Encana’s Cutbank Ridge shale gas assets in British Columbia and Alberta. If completed, the deal would have marked the largest Chinese investment in Canadian energy assets.

Encana added it would look for another partner or partners for Cutbank Ridge.

Canadian commentators said the cancellation of the PetroChina deal may come as a relief for the federal government.

If the government had approved the deal it would have been accused of selling strategic assets to foreigners; if it had blocked the deal, critics would have charged it with discouraging foreign investment, commentators said.

Canada’s position on foreign investments came under scrutiny last year when the government blocked BHP Billiton’s proposed takeover of Canada’s PotashCorp.

In related news, South Africa-based Sasol recently completed a shale gas deal in Canada, and Malaysia-based PETRONAS plans to invest in a shale gas deal with Canada’s Progress Energy Resources.

($1 = €0.70)


By: Stefan Baumgarten
+1 713 525 2653



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