In response to a call for public input by the powerful U.S. regulator, the China National Offshore Oil Corp. said SEC rules influence oil and gas companies around the world and should be changed to "inspire" them to find different types of resources to "ensure the world petroleum supply and world security.

"Oil and gas produced from oil sands and oil shale should be treated as oil and gas reserves like in conventional oil activities," said China's third-largest oil producer, which has a small stake in private oilsands startup MEG Energy Corp.

Italy's ENI, which is not involved in the oilsands but is often talked about as a potential corporate buyer, said unconventional resources such as the "tar sands," along with ultra deep water, liquefied natural gas and gas to liquids projects, represent an increasing proportion of exploration and production investments, but "are disfavoured under the current rules."

The SEC is undertaking a broad review of oil and gas reserves disclosure requirements. Reserves are a key measure of an oil company's worth. The SEC asked last December for feedback by Feb. 19 on whether it should change the rules, which have been in place for decades and widely seen as not having kept up with technological advancements. Written submissions are posted on the SEC's Web site.

Some believe the rules have kept some potential investors away from the oilsands, but a change would increase their appeal, especially in the eyes of reserves-hungry companies.

Paul Smith, senior vice-president at Imperial Oil, told the regulator that removing the exclusion of the oilsands would improve disclosure quality by presenting operations to investors and other financial statements users on the same basis that company management views the operations.

Nexen CEO Charlie Fischer said buyers of oil do not care how or from where the oil was extracted.

"The products produced from these activities compete in the same markets, and price received for all crude oil products (whether from conventional oil reservoirs, oil shales, tar [oil] sands or other are intertwined."

ccattaneo@nationalpost.com

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