Foreign investors more familiar with projects in the emerging markets of Eastern Europe and tropical escapes of Southeast Asia are finding a new destination for their dollars and francs: Western North Dakota's oil patch that's home to booming towns, low unemployment rates and high incomes.
SelectUSA, a government foreign investment initiative, said the state has drawn at least 31 publicly announced foreign investment projects since 2003 worth a total of $1.04 billion.
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Now two foreign companies are planning a pair of large oil patch developments worth $800 million.
Williston Economic Development head Tom Rolfstad said there's likely more foreign investment than what's immediately visible.
Among the latest projects is Swiss firm Stropiq's plan for a $500 million, 219-acre mixed-use development called Williston Crossing featuring 1 million square feet of retail, entertainment and hotel space along with offices and residential plots.
The oil patch is "an emerging market by most definitions, except it is in the continental U.S.," said Stropiq co-founder Terry Olin. "We have rule of law and property rights — things that in most emerging markets can be challenging."
Olin has North Dakota roots but spent the past two decades working on projects in Moscow and St. Petersburg, Russia.
Another foreign investment firm, Singapore's Barons Group of Companies, has proposed a $300 million project in Dickinson called Barons Vista that includes a mall, four-star hotel, spa, offices and condos.
Barons entered the U.S. buying distressed properties during the recession. CEO Danny Lim said that during that time he "realized North Dakota is not suffering a depression and jobs are still very rampant."
North Dakota is an outlier in Barons' portfolio. In Malaysia, the group is developing 36-floor towers replete with luxury residences featuring infinity pools and a hotel. And in the hills of the idyllic Indonesian island of Bali and on the white sand beaches of Boracay in the Philippines it's planning five-star resorts.
Some foreign investments are smaller in scale but still play a role in the local economy. Turkish company Serka Services spent at least $26 million last year on a Fuddruckers restaurant and a hotel in Williston.
Big or small, the rapidly growing, highly paid oil patch population — combined with a severe shortage of housing and retail space — is attractive for such projects, though some people are wary because booms can go bust. That happened in the 1980s in Williston.
Investors "recognize that unlike in a large population area somewhere else in the world, we do have the risk that we become a sparsely populated area again if the oil industry were to shut down," said Olin.
"The first thing that comes to mind is the freezing temperature," added Lim. "The other thing they are thinking is this is a really remote area — are you sure you want to put your money there?"
But unlike previous booms, there are tens of thousands more wells still to be dug and much better technology available, so members of the oil industry and state leaders anticipate oil production will continue for decades to come.
"The situation here, as you well know, is that there is no reason for so many people to live here in the past," said Olin. "And now there is. And we have an awful lot to create."
Contact Josh Wood at https://twitter.com/JWoodAP