Canada Approves Controversial Oil Company Sale To China

Canada

Photo: Flickr / s.yume

Canadian oil giant Nexen’s sale to China has been approved, according to multiple sources.Nexen’s stock was up +11 per cent after hours.

CNOOC, owned by the Chinese government, is paying $15.1 billion for the company.

PM Stephen Harper is speaking now on the deal.

He says that going forward, Canada will block foreign governments’ attempts to control the country’s controversial tar sands development except in “exceptional circumstances.” 

He said transactions tar sands deals are increasingly being proposed by foreign companies with strong ties to their home governments. 

But he added, “Canada has decided to have a free market economy, and today’s choice reinforces that decision.”

He also said the transaction was assessed under the country’s national security statutes “and did not raise” any security concerns.

Nexen owns a 7 per cent stake in Alberta’s controversial tar sands development through a subsidiary.

Shareholders approved the bid from CNOOC in August by an overwhelming 99-per cent margin, according to Macleans’ Erica Alini

The government must approve any foreign takeovers worth over $330 million. But CNOOC’s close ties to the Chinese government complicated the deal, she said:

…earlier this year, the Canadian Security Intelligence Service warned that firms “with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.” So the Nexen takeover might also have triggered review under national security parameters, even though CSIS never specifically mentioned CNOOC.

In August, Canada’s Sun newspaper ran a poll showing 57 per cent of 2,099 respondents opposed approving the deal. Only 9 per cent favoured it.

Alini says the proposal has also triggered review in the U.S., the U.K. and the E.U., — Nexen has assets in each.

The EU approved the deal today.

Meanwhile, the Canadian dollar has declined in evening trade:

canadian dollar nexen

Photo: ForExPros

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