• 4 hours PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 6 hours Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 8 hours Syrian Rebels Relinquish Control Of Major Gas Field
  • 9 hours Schlumberger Warns Of Moderating Investment In North America
  • 10 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 11 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 12 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 14 hours New Video Game Targets Oil Infrastructure
  • 15 hours Shell Restarts Bonny Light Exports
  • 17 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 23 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 1 day British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 2 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 2 days Rosneft Signs $400M Deal With Kurdistan
  • 2 days Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 3 days Conflicting News Spurs Doubt On Aramco IPO
  • 3 days Exxon Starts Production At New Refinery In Texas
  • 3 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 4 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 4 days VW Fails To Secure Critical Commodity For EVs
  • 4 days Enbridge Pipeline Expansion Finally Approved
  • 4 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 4 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 5 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 5 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 5 days Aramco Says No Plans To Shelve IPO
Oil Markets Fear Iraqi Escalation

Oil Markets Fear Iraqi Escalation

The military operation by Iraqi…

Can India Overtake China In The EV Revolution?

Can India Overtake China In The EV Revolution?

India wants to drastically increase…

MINING.com

MINING.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

More Info

Local Oil Sands Companies Feel the Brunt of Canada’s New Rules

Local Oil Sands Companies Feel the Brunt of Canada’s New Rules

Canada’s move to stop foreign state-owned firms from investing in its oil sands have pushed down shares in local companies, knocking their value between 20% and 30% since the rules came in, a new study from the University of Calgary says.

The report analyzes share prices of oil sands companies since December 2012, when the regulations were first announced, to March this year, concluding junior oil sands companies are the ones that have suffered the most.

Small miners’ stocks plummeted by as much as 50% in the first half of 2013, diverging greatly from where oil prices and the wider stock market were heading at the time. Senior and intermediate players showed steadier performance.

The impact of foreign investment restrictions on the stock returns of oil sands companies 
Source: “The impact of foreign investment restrictions on the stock returns of oil sands companies.” June 2014.

Canada's oil sands are said to need roughly $100 billion in investment over the next five years. The study warns that having removed such a significant source of funding could make those projects even more expensive, becoming a drag on shares.

"The findings of this paper indicate the federal government's policy change has resulted in the material destruction of shareholder wealth," the study's authors wrote.

 The impact of foreign investment restrictions on the stock returns of oil sands companies
Source: “The impact of foreign investment restrictions on the stock returns of oil sands companies.” June 2014.

Juniors rely on outside financing to grow their operations much more than their larger counterparts. Much of that investment comes from joint ventures, in which a partner buys a stake in a project and then gets a proportionate share of its returns.

Those sorts of transactions, at least in theory, are still allowed under Ottawa's new rules, provided the foreign state-owned entity doesn't have control. In reality, the rules are causing investment to slow down, the report concludes.

By Cecilia Jamasmie



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News