(Reuters) – Brookfield Asset Management Inc, one of Canada’s top investment management firms, is actively scouting for oil assets in the oil-rich Western Canadian province of Alberta, said Chief Executive Bruce Flatt on Wednesday.
“Our main investment objective is to put money where money is scarce,” Flatt told media on the sidelines of Brookfield’s annual shareholder meeting in Toronto. “And oil and gas, and especially oil in Alberta, is a sector that is under more stress than it has been in a long time.”
The Toronto-based company, which owns a vast portfolio of real estate, energy and infrastructure assets, has profited in the past from contrarian bets. These included investments in the hard-hit forest products sector following the global financial crisis.
Flatt sees similar opportunities now in the energy sector, which has been hurt by a sharp pullback in the price of oil.
Last month, a consortium of private equity funds managed by Macquarie Capital Group Ltd and Brookfield agreed to buy U.S. oil and gas company Apache’s exploration and production business in Australia for $2.1 billion in cash.
“We do not have a lot of oil exposure today, most of the stuff we have in Alberta is natural gas related and derivatives of natural gas,” said Flatt. “And our view today is that it’s a good time to be starting into the oil business, which is why we did the Apache transaction and there may be others.”
Flatt said Brookfield was open to looking at both midstream and production assets, and asset valuations that range from the hundreds of millions of dollars to a few billion dollars.
“We generally don’t do too many small transactions,” he said, pointing to the $2.1 billion Apache deal and the deal it struck in October to buy Encana’s Clearwater assets in Southern and Central Alberta for C$605 million ($506 million).
Flatt declined to comment on the seismic political shift in Canada’s oil-producing heartland of Alberta, where the left-wing New Democratic Party (NDP) swept to victory on Tuesday, after 44 years of Conservative rule in the province.
The NDP have vowed to review oversight of the oil and gas sector, and the results stunned many in the energy sector and sent shares in Alberta-focused energy companies tumbling on Wednesday.