Oil Companies Optimistic in Long Term Outlook for Keystone Pipeline
Wednesday, 25 January 2012 | 00:00
The Oil and Gas sector was dealt a blow earlier this month after President Barack Obama turned down TransCanada's multibillion-dollar proposal to build a pipeline from the oil-sands region in western Canada to the pipeline hub of Cushing, Oklahoma. Oil stocks took a surprisingly small hit after the news, as analysts are optimistic the project will eventually be approved -- likely following this year's presidential election. Additionally, companies have expressed interest in turning to China to diversify Canada's energy exports. Presently, roughly 99 percent of Canada's crude exports go to the U.S. Five Star Equities examines the outlook for companies in the Oil and Gas sector and provides equity research on Chevron Corporation and Suncor Energy, Inc.
Obama called Prime Minister Stephen Harper to explain that the decision last week was not on the merits of the pipeline but rather on the "arbitrary nature" of a Feb. 21 deadline set by Republican legislators as part of a tax measure he signed, Harper's office said. Canada is now looking at alternatives for exporting its oil following Obama's decision. According to The Washington Post, Obama's administration invited TransCanada to reapply for the pipeline, "an overture the Calgary-based company promptly said it would accept."
"This is clearly the biggest infrastructure project on the continent, and once the election is settled, we believe it will be approved," John Stephenson, who helps manage $2.7 billion for First Asset Management Inc. in Toronto, says.
Five Star Equities releases regular market updates on the Oil and Gas Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns.
TransCanada chief executive Russ Girling explains that Oil producers and refining firms are still contractually obligated to Keystone XL despite U.S. President Barack Obama's permit denial. Meanwhile, Alberta Premier Alison Redford remains optimistic the Keystone pipeline has a good chance in the future. Redford said that while the decision is a setback for a project vital to the province's economic expansion, there is strong hope the pipeline can be brought back to life in the coming months.
Source: Five Star
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