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One year after announcing a partnership, Encana and PetroChina now say the estimated $5.4-billion deal is off. The failure stems from an inability to agree on the operational aspects of the joint venture. Both entities staked a lot on the success of the deal when it was announced back in February. Now Encana’s investors are showing a loss of confidence and PetroChina is suffering from loss of face.

QUESTIONS:

  1. For more than a decade, we have been hearing about companies going global by investing in China, now the shoe is on the other foot. Look at reasons for going global in the text and identify why China  is looking to Canada.
  2. Aside from the fact that the article says the deal was a joint venture, what are the characteristics that make it a joint venture? What do the two companies offer each other that make such an arrangement attractive?
  3. With all that China hoped to gain from this joint venture, why would it walk away?

SOURCE: N. Vanderklippe & C. Tait, “Power Struggle Ends Encana, China Gas Deal,” Globe and Mail (Retrievable online at http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/power-struggle-ends-encana-china-gas-deal/article2068877/)

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