Two of China's largest state-owned energy giants — CNOOC and Sinopec — have expressed interest to the federal government about investing in Canada's potash sector and fertilizer production, government documents obtained by Postmedia News show.

The documents also reveal the Conservative government was aware for the past year, well before the recent controversy over foreign investment rules and the takeover bid for Nexen, that CNOOC was interested in cooperating "with other oil majors in investments in Canada." China was also looking for "early completion" of the Northern Gateway oilsands pipeline currently under review by a federal panel.

As the Conservative government finalizes a new policy framework on foreign investment — and considers CNOOC's $15.1-billion takeover bid for Calgary-based petroleum producer Nexen — it has been doing so knowing that major Chinese national oil and gas companies have been looking to invest in potash and fertilizer processing as well.

The Harper government has already blocked an attempted hostile takeover of Potash Corp. of Saskatchewan by Australian mining giant BHP Billiton, arguing that crop nutrient potash was a strategic resource for Canada.

With that fresh in the minds of investors and the federal government, documents obtained by Postmedia News under access to information legislation show Chinese state-owned oil and gas companies such as China National Offshore Oil Corporation and Sinopec have told the federal government about their potential interest in investing in Canada's potash sector and fertilizer processing.

The documents also show China already viewed Canada as a desirable place to invest and wanted an "early conclusion" of the recently signed Canada-China foreign investment promotion and protection agreement that is being hotly debated in the House of Commons.

Emails from Natural Resources Canada detailing Minister Joe Oliver's trip late last year to China show he and senior officials met with the chairmen of CNOOC and Sinopec, who expressed their desire to possibly stake a claim in Canada's potash sector and fertilizer production.

"Minister met with the chairman of (CNOOC), who was very positive on investment in Canada . . . He (the chairman) indicated that Canada is rich in resources and has a favourable investment environment, and noted that they may cooperate with other oil majors in investments in Canada," says a November 2011 email from assistant deputy minister Stephen Lucas to Natural Resources Canada deputy minister Serge Dupont and other officials about the trip.

"CNOOC is actively looking at further projects in Canada, including potash given that CNOOC is a major player in China's fertilizer market. CNOOC's goal is to be a top-tier integrated energy company (onshore and offshore), building on strengths in offshore and as leading LNG company in China. See partnership with Husky expanding in China, Canada and elsewhere."

The email also highlights a meeting during the China trip with the Sinopec chairman and Sinopec International CEO, where they identified they were keen on investing in Canadian natural gas and possible fertilizer processing with Canadian potash.

"Sinopec looking at LNG (liquefied natural gas) purchases for import to China as well as potential fertilizer processing in Canada using Canadian potash and natural gas," says the email, which came in the midst of Sinopec purchasing Canadian oil and gas company Daylight Energy Ltd. for $2.2-billion.

Calls to the Canadian offices of CNOOC and Sinopec were not returned.

Saskatchewan is home to about one-third of the world's potash production and about half of the world's potash reserves. The province currently has 10 mines and three producers — Potash Corp., Mosaic and Agrium, notes the provincial government.

Two smaller private Chinese companies and one larger firm (which is a subsidiary of a Chinese state-owned coal producer) have already obtained potash holdings in Saskatchewan that are in the early stages of exploration, according to the Saskatchewan government.

Kent Campbell, deputy minister of the provincial Ministry of the Economy, said he's not aware of any particular interest in potash or fertilizer production investments from CNOOC and Sinopec.

Saskatchewan generally welcomes new foreign investment in greenfield potash properties, he said, but noted there are very few vacant potash properties remaining in the province. Larger state-owned companies looking to invest would likely have to purchase another company's potash holdings, he said.

"Any takeovers would have to meet a pretty high threshold in terms of net benefit," Campbell said in an interview.

With such large potash resources controlled by a few major producers and a handful of countries being the main consumers, a major takeover could change market behaviour, he said.

"If it were a state-owned enterprise, we would have similar concerns in that their interests might not be purely profit maximization, but rather getting lower-priced product," Campbell said. "There's always concerns around a state-owned player, but that doesn't mean that can't happen."

The email also explains that Oliver met with Zhang Xiaoqiang, vice-chairman of the National Development and Reform Commission (which helps plan the Chinese economy), who said China was already "positive on Canada's friendly investment climate" and saw "great potential" for further Chinese investment in Canadian natural resources.

The vice-chairman, in his meeting with Oliver, "noted interest in early completion of Northern Gateway project as well as LNG export terminals," and also raised concerns over "lengthy EA (environmental assessment) processes" in Canada.

A few months after the minister's visit to China, the federal government overhauled its environmental assessments for natural resource projects — including setting fixed timelines of up to 24 months for environmental reviews of major oil and gas and mining projects, including the Northern Gateway pipeline.

In a statement Thursday, Oliver said Canada must expand its natural resource export markets to support Canadian workers, grow the economy and fund critical social programs. Canada is well positioned to feed the growing demand for natural resources in the coming decades, he said, and the Conservative government welcomes foreign investment.

"Canada has a long-standing reputation for welcoming foreign investment and thanks to steps taken by our government we have one of the best investment climates in the world," Oliver said.

"We have a broad framework in place to promote trade and investment, while at the same time protecting Canadian interests. Our government will continue to welcome foreign investment that benefits Canada."