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Alberta’s new political leadership is calling on Ottawa to take another look at foreign investment rules blamed for a dramatic drop in energy investments from China.When the federal government gave its approval of the $15.1-billion (U.S.) takeover of Nexen Energy ULC in late 2012, it came with a caveat: a raft of new policies intended to ensure such a deal would not happen again. Canada is not “for sale to foreign governments,” Prime Minister Stephen Harper said as he effectively blacklisted state-owned companies from further oil-sands takeovers.The guidelines sparked worry in China, and prompted warnings from the energy industry, bankers and lawyers. The guidelines, some have said, are discriminatory against China, and have blocked a major source of money that could be used to build a new generation of Fort McMurray-area projects.

Now, the Alberta government itself is taking up those concerns with the federal government, in hopes of again prying open the spigots from China.

“We are urging a review of some of the quick changes that were done to our Investment Canada Act,” said Ron Hoffmann, the province’s newly named senior representative for the Asia-Pacific Basin.

The changed guidelines have created “confusion,” he said, speaking at the Canada-China Forum on Energy & Environment in Beijing on Thursday.

“We just think there’s some looseness in the language,” Mr. Hoffmann said.

Alberta wants the federal government to clarify what counts as a state-owned company, a question that can be thorny in a country such as China where the lines are often blurry between public and private enterprise. Efforts in China to boost productivity among state firms are also blurring the line between what is a commercial company and what isn’t.

The province also believes foreign companies should be given credit for a track record of Alberta energy investments that “has been quite a positive one,” Mr. Hoffmann said, referring to both CNOOC and Sinopec. The province is petitioning Ottawa on a series of issues, including its policies on temporary foreign workers and skilled trades, he said.

The Canadian Association of Petroleum Producers, meanwhile, says Ottawa should raise the dollar threshold for scrutinizing foreign investments – now set at $354-million – because it is hampering the ability of smaller companies to make deals.

The requests for change comes as China’s state-owned companies grow increasingly sour on Alberta, owing in part to their struggles to spin profit out of the many billions they’ve spent. “We haven’t seen significant returns from the investments, so there is no strong motivation for the state-owned companies to further invest in Canada,” said Li Pilong, chief geologist and assistant president at Sinochem Group.

The new investment rules have also fostered a belief that “it is not possible for the state-owned companies to further invest in oil sands,” he said.

Ian Wild, an executive vice-president at ATB Financial, added: “There’s been tremendous lost opportunity.”

There are signs, however, that a second stage of Chinese investment is building, as private companies work toward deals that, though they are much smaller in dollar terms, may see Asian money fall into new places. ATB is currently in some 10 “sets of discussions” with Chinese companies that want to buy into Alberta real estate, construction assets and service companies, as well as barrels in the ground, Mr. Wild said.

“There won’t be very many $15-billion transactions by privates,” he acknowledged. “But over five years, you may see a cumulative number like that. I’m quite optimistic.”

A spokesman for Industry Minister James Moore said no request for a review has reached the minister.

“I’m not aware of any official request on this issue,” said Mr. Moore’s spokesman Jake Enright. “But we have a really positive relationship with the Government of Alberta and we are open to sitting down with them to discuss any proposal they might have.”

Some Chinese private investors are coming up with ideas of how to do things differently. Charles Yan, president of Cadavisa Investment Group, wants to build a plant to convert natural gas to liquid petrochemical feedstock, which can be more easily transported than gas that is super-chilled to load onto ships as LNG. His company has spent two years working to adapt Chinese technology to Canadian regulatory and safety requirements.

Private-company interest is driven largely by a desire for Canada’s abundant natural resources, everything from oil to beef to jade, a coveted gemstone in China, said Gong Jialong, the chief executive of Lianchang Petroleum Corp. Canada also suffers less of the instability that has burned Chinese investors in places such as Iraq and Sudan, he said.

“Investing in Canada is the ideal solution,” he said.

“We have already seen the peak of SOE [state-owned enterprise] investment. But for the next two or three decades, there will be a new wave of investment from China’s private sector.”

With a report from Shawn McCarthy in Ottawa