Chinese Set Sights on Emerging Oil Sands

Since the 1960s, oil sands have been in development in Alberta. In recent years, the speed of development has accelerated especially in the Athabasca region, thus drawing institutional investor money. Asian public investors, like the Korea Investment Corporation (KIC) have parked cash into the oil sands sector in private firms like Osum Oil Sands Corp. In February 2010, Athabasca Oil Sands entered into a joint venture with Petrochina before Athabasca’s initial public offering providing nearly $2 billion in capital. Oil sands can be viewed as a hybrid of infrastructure and energy.

Oil sand projects require patient capital, as planning projects and hurdling through regulatory obstacles can be cumbersome and expensive. Larger and more complex projects risk delays and cost overruns. Investing in oil sand projects bear risks such as: environmental risk, financial risk, regulatory risk, execution risk, and oil price risk.

Oil sand projects are experiencing a boom in capital and projects are being executed.

New production methods have been invented and implemented, thus lowering extraction costs and increasing environmental efficiency. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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