Canada: Oil patch feeding frenzy predicted

The Canadian oil patch could be hit by a major round of takeovers by multinational giants in the next year, Jeff Rubin of CIBC World Markets predicts, as the global energy industry looks increasingly to Alberta’s rich oil sands as one of the few major world oil reserves unfettered by political meddling.

Speaking at a conference for institutional clients, Mr. Rubin, the investment bank’s chief economist and chief strategist, anticipates oil sands firms will receive premiums of 40 to 45 per cent – roughly in line with the prices paid in major takeovers in the energy sector as well as the premiums paid for major Canadian mining companies in the past year.
“The Canadian oil sands, as the single most important energy asset in the world open to private capital, its ownership will reflect the global oil industry. And the process in which the global oil industry is going to assert ownership over that sector is by buying out the people who own it now.”

He said the oil sands offer both deep reserves and a government that doesn’t insist on owning a piece of the action – which has fast become a rare combination as governments stake a bigger claim on key oil resources. In such places as Venezuela, Russia and Kazakhstan, governments have demanded ownership in major deposits, delaying development, chasing away major energy companies and costing them billions in writedowns.

The Globe and Mail