Be prudent about Canada's energy sector, warn experts

Immediately after the CNOOC-Nexen deal, Canadian Prime Minister Stephen Harper announced a consequential decision: there would be new rules preventing any more State-owned enterprises (SOE) from purchasing controlling interests in the oil sands.

"If it's for the government to review and decide the proposals, they must have the criteria to define what is State-owned and what is not, but they never made it public," said Jia Wang, deputy director of the China Institute. "The restriction is only on oil sands, not on other industries yet."

On the pipeline front, US President Barack Obama has vetoed the Keystone XL Pipeline proposal carrying Alberta oil south to the American heartland, while the lingering Enbridge Northern Gateway Pipelines has been criticized by native groups citing concerns over oil sands expansion, which if completed would link Alberta with the west coastal marine terminal in Kitimat for transportation to the Asian markets by oil tankers. Sources say the United States is reluctant to see a closer energy connection between Canada and China.

For the moment, Chinese companies along with some global players such as Total, Statoil and Devon Energy are trapped in the bitumen mud, and sources reveal that some are planning for a retreat. When the companies rush for quick acquisition, they might overlook some of the risks, said Yongzhu Zhang, a senior engineer at Petro-Canada.

"It's advisory for Chinese companies going global to find a local strategic partner to set up a joint venture, instead of full takeover," said Zhang. "On one hand, the returns may have to split, but on the other, a lot of troubles can be saved because the local partner knows better dealing with stakeholders and governments."

Bracing for an emerging reshuffle scenario, investment experts caution Chinese investors to wait and see. "It can wait, but investors may want to bring a development plan for at least three years," said Yinghua Li, a senior investor between China and Canada. "They may have to prepare for a gloomy market for as low as $50 a barrel, and they can also have multiple options when oil prices rebound to $100."

"So I encourage investors to look at the longer term investment, and notwithstanding the lows. If we can ride through these pieces, and actually maybe even put some dollars to work in lower price environment, you may find coming out of the market places actually stronger as opposed to weaker," said Edgelow.