Approve CNOOC bid for Nexen, ex-Canadian central banker says
Canada should allow China’s state-owned CNOOC to buy Canadian oil company Nexen, a former central bank chief said on Wednesday, brushing aside arguments that oil is a “strategic” resource off-limits to foreigners.
David Dodge, who was Bank of Canada Governor from 2001 to 2008, listed some factors to consider when reviewing the US$15.1 billion bid, including the country’s need for foreign financing and the hefty premium CNOOC is willing to pay for the asset.
“How can that not be in our interest?” Dodge said to reporters after delivering a speech in Ottawa.
Dodge is now a senior adviser at law firm Bennett Jones and a respected commentator on public policy issues.
Under Canada’s foreign investment law, the industry minister must review the proposed acquisition to determine whether it is a “net benefit” to the country.
The Nexen bid has raised hackles among some members of Conservative Prime Minister Stephen Harper’s cabinet and the main opposition New Democratic Party is opposed to the deal. Critics worry about letting the state-owned Chinese firm extend its foothold in the oil patch, and some have cited national security concerns.
Dodge pointed out that most of Nexen’s assets were outside Canada, that CNOOC already owns a minority stake in the company’s Long Lake facility in northern Alberta, and that the government has shown no concern about other state-owned companies already operating in the oil sector.
“So do we automatically say that state-owned firms shouldn’t be in? We have [Norwegian oil and gas firm] Statoil in; it’s a state-owned firm,” he said.
“I can’t help but think this is more anti-Chinese than it is anything else because there’s every reason to allow this one to go through.”
He dismissed as “the stupidest thing” the notion put forth by some that oil is a “strategic” resource that should remain in Canadian hands.
“In some ways, ironically, in mines and woodlands, they can’t be moved. The real asset is there. You’ve got control over that asset, you have an infinite number of regulatory tools,” he said.
“The oil in the ground is owned by the people of Alberta. It’s a question of who we’re going to licence to take it out.”