ALBERTA

New Statoil boss says Canada a stable place to invest, despite Petronas decision

10/23/2012 03:31 EDT | Updated 12/23/2012 05:12 EST
CALGARY - The man in charge of Norwegian energy giant Statoil ASA's Canadian operations doesn't seem to be fazed by Ottawa's surprise rejection of another foreign player's multibillion-dollar oilpatch investment.

Stale Tungesvik, who moved to Calgary two months ago to take over as president of Statoil Canada, says Canada has a stable business environment and that his company intends to be here for the long term.

"We want to be judged by what we are doing and we really want to get a good business here in Canada," Tungesvik said in an interview Tuesday.

"We are very optimistic about our future here in Canada."

Industry Minister Christian Paradis announced late Friday the rejection of a $6-billion takeover bid by Malaysia's state-owned Petronas for Calgary-based Progress Energy Resources, saying it was not of net benefit to Canada. The companies were given 30 days to take another crack at getting their deal approved.

Observers have warned that the surprise move could scare off foreign investment that's badly needed to develop Canada's vast energy resources.

Much of the political wrangling has focused on whether state-owned enterprises such as Petronas or China National Offshore Oil Co. — whose deal to take over Calgary-based Nexen Inc. for $15.1 billion Ottawa is in the midst of reviewing — are acting strictly on business terms, or as arms of foreign governments.

Statoil is 67-per-cent owned by the Norwegian government and some of its shares trade on the New York and Oslo stock exchanges.

Meanwhile, Tungesvik, who was previously senior vice-president of renewable energy for Statoil, also seemed unconcerned about jumping from a green business to one often criticized for its environmental footprint.

"A lot of people made some jokes about that, actually — that you're going from the greenest green and then to oilsands," he said.

However, he added, "there are so much more similarities to the renewables and the oilsands than you could believe."

Oilsands development is controversial and Statoil's involvement in the industry has been criticized in Norway. Environmentalists deride the resource as "dirty oil" for its greenhouse gas emissions and effect on land and water. The company has been leading tours to its Leismer demonstration project in Alberta to show how the steam-driven development works.

The renewables business is similar in that companies must regularly deal with the concerns of local communities. For instance, Statoil has run into opposition to its offshore wind farms from fishermen and tourism industry officials.

Statoil is staying out of the Canadian renewables business for now, said Tungesvik.

"When it comes to offshore wind, we haven't seen that there is a funding regime in place in Canada that is attractive."

The Leismer project is currently producing about 20,000 barrels per day and Statoil has plans to double that rate. It has future oilsands developments in the work at Corner, Thornbury and Hangingstone.

Two years ago, Statoil formed an oilsands joint venture with Thai energy company PTT Exploration and Production, which Tungesvik says is going well.

"I think we really need a partner who sees things a little bit differently and asks questions and challenges us as an operator, so we don't actually get into kind of a comfort zone," he said.

"They have challenged us when they think we can do things differently, and they are supporting us when they think we are doing things well and that's good."

Statoil also produces oil off Canada's East Coast and has long-term plans to develop holdings in the Beaufort Sea.

MORE:Albertacp