China in Shell out

[William Ashley]

Tarsands oil is a pretty bid deal in Canada. Today news reports (High oil sands costs driving Shell elsewhere: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/high-oil-sands-costs-driving-shell-elsewhere/article1443623/) mentioned how Shell has opted to spend more money on exploration elsewhere, and pull out of the tar sands. This just after Tony Clement sold the governments Majority stake in athabascan tar sands to China.

What does this say about the future of oil? What does this say about the side of the world or the players that are doing the tar sands project? China a majority stakeholder in US oil? America is the #1 consumer of tarsands oil, and the Chinese are the ones who are delivering it to them, why is it that Shell doesn't want anything to do with it anymore?

Personally I think there is more going on then simply seeing Shell pull out of Alberta, and China move into it. Oddly Kazakhstan is the new home to Shells exploration - oddly though In the Shanghi 5 bloc or central Asia china is pretty dominant there also? Why wouldn't China have taken steps that Shell now is, especially if no oil tanker is required to move the oil...

The other option was in the states... not Canada... where are all them petro development dollars going now? It sounds like the government is spending billions on non cost efficient solutions, in vast complex works that are far more uneconomical than alternative solutions for the same price or less.

It seems an odd part of the world, namely the SCO sphere, for shell to be developing in. You could say the same about Chinas move into alberta though.

Edited January 26, 2010 by William Ashley

[bush_cheney2004]

.... why is it that Shell doesn't want anything to do with it anymore?

1) Looming enviromental and climate change baggage

2) Price volatility

http://www.thisislondon.co.uk/standard-business/article-23798809-shell-slows-canadian-tar-sands-projects.do

[ZenOps]

Tarsands extraction = difficult. Even more difficult and labour intensive than coal mining.

Canada = not desperate for oil locally, and does not have a workforce willing to labour like a coal miner. China = desperate for oil, and has available labour.

Perfect fit.

Edited January 26, 2010 by ZenOps

[Michael Hardner]

China = desperate for oil, and has available labour.

I suspected that China would be allowed to bring in visa workers to do cheap labour on this deal. How do our friends in the West feel about that ?

[Moonbox]

I suspected that China would be allowed to bring in visa workers to do cheap labour on this deal. How do our friends in the West feel about that ?

That'd be a joke if it's true. I hope Albertans would start lynching people.

[dlkenny]

I suspected that China would be allowed to bring in visa workers to do cheap labour on this deal. How do our friends in the West feel about that ?

Unlikely. Just because the company is owned by the Chinese doesn't automatically implicate Chinese workers into the equation. Japan oil has been operating in Alberta for a number of years already and they simply employ Canadian workers. What is important here isn't where the development dollars come from but that the investment is there at all. Without investment there is no development, no jobs created, and no tax dollars paid. If the chinese have the ability to make it happen while employing Canadian workers and following local labour protocol then I see no issue with it.

[wyly]

I suspected that China would be allowed to bring in visa workers to do cheap labour on this deal. How do our friends in the West feel about that ?

too late, they're already here....

[Michael Hardner]

Why wouldn't a Chinese company import workers ? Why shouldn't they ?

[ToadBrother]

Why wouldn't a Chinese company import workers ? Why shouldn't they ?

I don't know why Albertans would complain. My brother lives in Calgary and works with a whole lot of Filipinos. My wife's nephew, who lives in Edmonton, even married one, and we're finding out that there's quite a growing Filipino community in Alberta. So I'm not sure what the objection to the Chinese would be. I've heard on another thread that Haitians and Jamaicans aren't welcome (though I'm assured it's not racist), but the Chinese are, so surely it can't be an issue.

[fellowtraveller]

Personally I think there is more going on then simply seeing Shell pull out of Alberta

Perhaps you could explain where you get this incorrect and ridiculous comment?

You and the Globe don't seem to know that Shell currently operates a huge petrochemical complex and refinery at Scotford near Fort Saskatchewan near Edmonton (I'm surprised at the Globe ignorance). They just spent a couple of Billion expanding their capacity.

Edited January 26, 2010 by fellowtraveller

[fellowtraveller]

I suspected that China would be allowed to bring in visa workers to do cheap labour on this deal. How do our friends in the West feel about that ?

Chinese workers were brought in to weld at a huge project a few eyars ago, when it was impossible to get enough tradesmen. All those agreements are expired and there is sufficient Canadian labout available.

There won't be any or many Chinese nationals on site.

[fellowtraveller]

The other option was in the states... not Canada... where are all them petro development dollars going now? It sounds like the government is spending billions on non cost efficient solutions, in vast complex works that are far more uneconomical than alternative solutions for the same price or less.

You really, really need to do even a tiny bit of research.

If you did, you'd know that several billion dollars worth of deferred oil sands projects that were on hold in Alberta are now underway, all announced in the last few months and last few days.

[Michael Hardner]

Chinese workers were brought in to weld at a huge project a few eyars ago, when it was impossible to get enough tradesmen. All those agreements are expired and there is sufficient Canadian labout available.

There won't be any or many Chinese nationals on site.

What about if the job pays minimum wage plus lodging ?

[Jerry J. Fortin]

What about if the job pays minimum wage plus lodging ?

Dude, minimum wage wage in Fort Mac is like 20 plus dollars an hour.

[fellowtraveller]

What about if the job pays minimum wage plus lodging ?

That is ultimately what the Chinese got, or less.

They were ripped off at every step of the way.

But they aren't needed and won't get in this time.

The projects are back on line in Alberta, or enough of them that development will be at a more sedate pace.

Canada can rejoice, their gravy train is returning to the track.

[Michael Hardner]

Dude, minimum wage wage in Fort Mac is like 20 plus dollars an hour.

Right, so why wouldn't I import people who will work for 1/2 of that ?

[Michael Hardner]

That is ultimately what the Chinese got, or less.

They were ripped off at every step of the way.

But they aren't needed and won't get in this time.

The projects are back on line in Alberta, or enough of them that development will be at a more sedate pace.

Canada can rejoice, their gravy train is returning to the track.

Why won't they get in ? They own it, they gave cheap labour... what am I missing ?

[ZenOps]

Why won't they get in ? They own it, they gave cheap labour... what am I missing ?

China just wants the carbon fuel. Its almost the exact same scenario with the railroads. China has absolutely zero problem with the Crown Corporation actually owning the Canadian National Railway:

http://en.wikipedia.org/wiki/Crown_corporations_of_Canada#History

The main reason China helped build the railway is to share in the movement and trade of hundreds of millions of tonnes of wheat, copper, and now sulphur to China. They could care less who actually owns the railway as long as the resources keep on flowing.

I'm pretty sure its the exact same thing with the oilfields/tarsands/natural gas in Alberta. The Crown can actually own the pipelines and all the infrastructure - but China gets dibs on the final resources.

http://www.cn.ca/en/shipping-china-asia-north-america-sulphur-sulfur.htm

Sulfur is a huge business nowadays - many a train are totally filled with sulfur nowdays (maximum 115 128,700 kilgram loads per shipment) China is *very* happy to see 28 million kilograms of sulfur ship from Canada twice a day. The railroad is a resounding sucess in that respect (And there is no way you are putting 28 million kilograms on gasoline trucks without totally screwing up the one highway every day.)

http://www.shell.ca/home/content/can-en/products_services/solutions_for_businesses/sulphur/

Can Canada use that much sulphur locally? Hell no - we simply can't use it. In many ways it a waste product of gas refining, sort of like how drywall is just gypsum which was at one point just a waste product of copper mining.

Edited January 28, 2010 by ZenOps

[Oleg Bach]

There are those in our midst for the last thirty years who believe they are citizens of the world...that selling our power without consulting the people of Canada is a good thing - we are a family and no family head that is supposedly patriarcal should sell his wife and children into slavery - this is what our buisness community has done as far as trade with China.

The world will never be one - we are families a group eteranlly different and devided..but in mutual co-operation - to sell us though debt is dellusional and those in the bank towers who have done this should resign their positions - they have failed and are in error. We need walls and we need privacy and sorverignty.

[Michael Hardner]

China just wants the carbon fuel. Its almost the exact same scenario with the railroads. China has absolutely zero problem with the Crown Corporation actually owning the Canadian National Railway:

But they bought the oilsands, right ? Don't they have a workforce located in Canada ?

[Jerry J. Fortin]

But they bought the oilsands, right ? Don't they have a workforce located in Canada ?

China did not buy the oilsands. Far from it in fact. China owns a tiny share in a huge and as yet not completely mapped out piece of at least three provinces worth of mineral resource land rights. They can hire who they like. Most Albertans would be happy to run the heavy equipment, or own some business dealing with oil companies rather than work for them anyway.

[DFCaper]

Why won't they get in ? They own it, they gave cheap labour... what am I missing ?

Why wouldn't an American company do the same?? There are laws to prevent it....

I personnally think China is just interested in gaining control over oil researves for energy security.

Edited January 28, 2010 by DFCaper

[Michael Hardner]

Why wouldn't an American company do the same?? There are laws to prevent it....

Are you asking why Americans wouldn't do the same ? They have done, but there's not so much savings bringing in American workers...

Edited January 28, 2010 by Michael Hardner

[fellowtraveller]

Why won't they get in ? They own it, they gave cheap labour... what am I missing ?

Are you serious?

Shell has some major Dutch shareholders, that doesn't mean a wooden shoe store in Fort McMurray is going to prosper.

[DFCaper]

Are you asking why Americans wouldn't do the same ? They have done, but there's not so much savings bringing in American workers...

Why Wouldn't Americans bring in cheap Chinese labour to Canada?? It may help there profitibility just as much, and the logistics are the same...