Canada approves CNOOC takeover
Source: Agencies |
December 9, 2012, Sunday
|
Print Edition
Print Edition
CANADA approved China's biggest ever foreign takeover, the US$15.1 billion bid by CNOOC Ltd for energy company Nexen Inc, after the Chinese giant agreed to various conditions, but drew a line in the sand against future purchases by state-owned enterprises.
In a fierce defense of a tough, new foreign investment framework, Prime Minister Stephen Harper said Canada would not deliver control of the country's oil sands - the world's third-largest proven reserves of crude - to a foreign government.
The ruling, anxiously awaited by investors and politicians alike, followed months of heated debate about how much of Canada's energy sector could be absorbed by companies run by other nations.
Canada agreed to this deal, but will not do so next time.
Heated debate
"To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead," Harper told reporters after Ottawa gave the deal the green light, along with approval for the less controversial takeover of gas company Progress Energy Resources Corp by another state-owned energy company, Petronas of Malaysia.
"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.
Top executives at CNOOC welcomed Canada's green light for the deal.
"We believe the transaction provides opportunities for Nexen employees, partners and for CNOOC," CNOOC Chief Executive Li Fanrong said.
The approval came after CNOOC made a new commitment, on transparency. That added to other concessions on employment and capital investments, which it had outlined in July when it announced its bid for Nexen.
CNOOC said yesterday it will provide an annual compliance report to the Canadian government. Other commitments include making Calgary the headquarters of its North and Central American operations, retaining Nexen's management team and employees, seeking a secondary listing in Toronto and investing in Canadian oil sands over the long term.
In 2005, US lawmakers blocked a CNOOC US$18.5 billion bid for oil company Unocal over security concerns.
In a fierce defense of a tough, new foreign investment framework, Prime Minister Stephen Harper said Canada would not deliver control of the country's oil sands - the world's third-largest proven reserves of crude - to a foreign government.
The ruling, anxiously awaited by investors and politicians alike, followed months of heated debate about how much of Canada's energy sector could be absorbed by companies run by other nations.
Canada agreed to this deal, but will not do so next time.
Heated debate
"To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead," Harper told reporters after Ottawa gave the deal the green light, along with approval for the less controversial takeover of gas company Progress Energy Resources Corp by another state-owned energy company, Petronas of Malaysia.
"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.
Top executives at CNOOC welcomed Canada's green light for the deal.
"We believe the transaction provides opportunities for Nexen employees, partners and for CNOOC," CNOOC Chief Executive Li Fanrong said.
The approval came after CNOOC made a new commitment, on transparency. That added to other concessions on employment and capital investments, which it had outlined in July when it announced its bid for Nexen.
CNOOC said yesterday it will provide an annual compliance report to the Canadian government. Other commitments include making Calgary the headquarters of its North and Central American operations, retaining Nexen's management team and employees, seeking a secondary listing in Toronto and investing in Canadian oil sands over the long term.
In 2005, US lawmakers blocked a CNOOC US$18.5 billion bid for oil company Unocal over security concerns.
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