Canada approves CNOOC's Nexen takeover
Canadian Prime Minister Stephen Harper approved the HK$117 billion takeover of Canadian oil-sands firm Nexen by China's CNOOC on Friday. The deal is the largest ever takeover by a Chinese company.
Canadian Prime Minister Stephen Harper approved CNOOC’s US$15.1 billion (HK$117 billion) takeover of Nexen and Petroliam Nasional’s C$5.2 billion (HK$40.7 billion) takeover of Progress Energy Resources.
The deal by Beijing-based CNOOC is the largest ever takeover by a Chinese company, according to data compiled by Bloomberg. It gives the state-owned company a stake in Canada’s largest oil-sands project and the biggest position in the Buzzard oil field in the UK North Sea.
China is securing global reserves to feed demand in the world’s second-largest economy, which accounted for half of the world’s oil consumption growth last year, according to the US Energy Information Administration. Harper, who has touted Canada as an emerging “energy superpower,” has called it a national priority to diversify energy exports, sending less to the US and more to Asia.
“It’s important to have clarity on this, not just for Canada’s foreign relations with certain super-power nations but also to ensure timely development of these very important resources,” said Robert G. Gill, portfolio manager at Toronto-based Aston Hill Financial, which has more than C$6 billion assets under management.
The two bids tested Harper’s ability to balance the need to bolster economic relations with Asian economies without letting them gain too much influence over the world’s third-largest pool of oil reserves. While allowing the deals, he also said Canada won’t approve state-owned companies taking controlling interests in any more oil-sands projects, except in “exceptional circumstances.”
“These were difficult decisions” that reflect “the broad views of Canadians,” Harper said.