Canada Opposition Party Says Govt Must Reject CNOOC/Nexen Deal

OTTAWA - Canada's main political opposition party said Thursday the Conservative government must reject Beijing-controlled CNOOC Ltd.'s planned $15.1 billion takeover of Calgary, Alberta-based Nexen Inc., because Canadian concerns about the deal can't be addressed through what it calls an "opaque" investment-review process.

The decision from the left-leaning New Democratic Party comes less than 24 hours after the Canadian legislature formally rejected the party's demand to hold public hearings on the proposed deal, which is being reviewed by the Canadian government.

Under Canada's foreign-investment law, approval hinges on whether the deal is determined to provide a so-called net benefit to the country's economy. The federal government has the power to block the deal if it believes it isn't in the country's economic interest.

The NDP has complained that the process goes on in secret, and that there's no clarity as to exactly what net benefit means.

"We cannot support the rubber-stamping of this deal," said Peter Julian, an NDP lawmaker who represents the Vancouver area. "The public confidence in the government's ability to handle and review this transaction has eroded," he said.

Mr. Julian said that, in discussions with the public and other interested parties, his party heard concerns about CNOOC's ability to live up to its pledge to keep current Nexen employees; national security fears, given the close ties between CNOOC and China's rulers in Beijing; and CNOOC's environmental stewardship.

Nexen has oil and gas assets in western Canada, the U.K. North Sea, the U.S. Gulf of Mexico and offshore Nigeria.

Representatives for CNOOC and Nexen weren't immediately available to comment on the NDP's opposition to the deal. Attempts to reach Canadian Industry Minister Christian Paradis, who is overseeing the CNOOC review process, weren't successful.

The Conservative government has a majority of the seats in the Canadian legislature, so the NDP has no power to block the deal. However, its vocal opposition could cause problems for the government, and persuade Canadians to consider the implications of allowing CNOOC, a Chinese state-owned enterprise, to obtain such a big footprint in the Alberta oil sands.

Canadian government officials are said to be under pressure from some stakeholders, most notably the province of Alberta, to exact better terms from CNOOC before its deal is approved, in terms of firmer job and investment guarantees, and ensuring major Canadian representation on the board and in the executive suite. To date, CNOOC has pledged to make Calgary the headquarters for its North American operations, list its shares on the Toronto Stock Exchange and keep current Nexen employees.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Karl | Oct. 4, 2012
The sale of NEXEN to the CCP leadership of Communist China may seem attractive to shareholders because of certain assets that are being shut but this means the Chinese gain the second largest stake in the GOM etc. and with basically unlimited capital the abilty to ramp up operations in Alberta, Nigeria, and UK North Sea. For me as an American? Im totally opposed to this sale period. China is financing oil development in Venezeula and Chavez and also Equador after US policy mistakes led to XOM and COP being tossed out. What you see is China exploiting American foreign policy mistakes to rapidly buy up resources all over the globe and right in the Gulf of Mexico. I didnt know the UK could afford to hand the North Sea to the CCP either. China got into Iraq(CNOOC) but I dont recall them taking part in the fun? They are being extremely smart but as down in Venezeula the people soon find out that Chinese take over and pay in contracts to other Chinese construction firms treating the regular citizens badly. Chavez may be financing his base with their cash but long term they will lose. Canada and Australia are resource economies and the top prizes for the Chinese. As Sun Tzu noted 2,500 years ago the best war is won without a fight-everything is economic and the way I see things the USA has been defeated without a shot and the Chinese benefit from every deal now. Are the Canadians that desperate for cash? Do the Saudis have the Chinese buying their oil fields? CNOOC is not a private company but a government run firm and the Chinese CCP is not a democracy-they run a giant police state. We are the fools.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Land GIS Spatial Analyst - Mineral Land
Expertise: Contracts Engineer|Geologist|Lease Analyst
Location: Denver, CO
Regional Sales Executive
Expertise: Business Development|Sales
Location: Jacksonville, FL
Land Representative - MCBU Midland Surface
Expertise: Landman
Location: Midland, TX
search for more jobs

Brent Crude Oil : $48.06/BBL 2.51%
Light Crude Oil : $45.77/BBL 2.17%
Natural Gas : $2.97/MMBtu 2.30%
Updated in last 24 hours