Joe Oliver heads back to China to reassure investors

Natural Resources Minister Joe Oliver is off to China to tell investors there that their prospects in Canada remain strong
after a bleak message from a former cabinet colleague said they've dried up.

Oliver was heading to China after meeting Friday with Japan's Minister of Economy, Trade and Industry, Toshimitsu Motegi. The two ministers announced a "strategic energy partnership" on oil and gas co-operation, focused mainly on support efforts to export liquid natural gas from Canada.

Japan is looking for alternatives to nuclear energy as it deals with the aftermath of the Fukishima nuclear plant disaster. Friday's agreement followed discussions between Prime Minister Stephen Harper and Japanese Prime Minister Shinzo Abe in Ottawa last month.

Oliver said one of the objectives of the China trip is to make thepoint that it is no more difficult for companies, includingstate-owned enterprises, to come into Canada and invest than it wasa year ago.

Last week, former Conservative cabinet minister Jim Prentice said Chinese investment had all but dried up in Canada's lucrative oiland gas sector.

Numbers show 'dramatic drop'

Prentice, a former industry minister, cited figures that showed adramatic drop in the oil and gas sectors as well as mergers andacquisitions from China.

"It's not true to say the Chinese investment prospects havedried up. It's important to have those discussions to make sure thatthere is a clear understanding of where we're coming from," Olivertold The Canadian Press in an interview Thursday.

"The numbers are what they are, but the issue is what has causedthose numbers."

Prentice, now a CIBC executive, said investment in the oil andgas sector had dropped to $2 billion from $27 billion during thesame period last year while mergers and acquisitions dropped to $8billion from $66 billion.

Oliver said he doesn't dispute Prentice's numbers but said theycould be skewed a bit by last year's landmark $15.1-billionacquisition of Calgary oil giant Nexen Inc. by China's CNOOC.

He also said that in recent meetings with New York investmentbankers, he was told that it is harder to attract capital, includingfrom state-owned enterprises such as those from China, which haveinvested heavily in Alberta's oilsands.

Three ministers heading to China this fall

Oliver is one of three cabinet ministers, in addition to GovernorGeneral David Johnston, who will be in China this week or next.He will also travel to South Korea to attend an energyconference. Oliver said he will be "promoting Canada as a
destination of choice for Asian investment in the natural resourcesectors."

Oliver is expecting questions, especially in China, about theopposition the government faces from First Nations groups, inparticular, in getting a pipeline built that would connect PacificOcean ports with Alberta energy fields.

"Naturally, they want to know when they can get access to thoseresources. In the past they've raised some of the regulatory issues but they continue to ask about issues like aboriginal involvementand labour," he said

Canada's 'got to beable to deliver'

Oliver said the clock is ticking on Canada to build the deliveryinfrastructure it needs to compete in the Asian energy market.

"While Canada is attractive, we've got to be able to deliver,"he said.

"As long term contracts are entered into, the size of thelong-term demand declines. We do have to move on these issues."

"The resources are in the ground but they don't necessarily havethe same demand if you wait."