Government Extends CNOOC/Nexen Review

By Omid Ghoreishi, Epoch Times
November 4, 2012 Updated: October 1, 2015
Pedestrians cross a footbridge in front of the CNOOC global headquarters in Beijing, Oct. 23, 2007. The Canadian government is again extending its review of a bid by Chinese state-owned CNOOC to take over Canadian oil company Nexen. (Frederic J. Brown/AFP/Getty Images)

The federal government has announced it is extending its review of a bid by China National Offshore Oil Corporation to take over Calgary-based oil producer Nexen Inc..

Industry Minister Christian Paradis said in a statement Friday that the review, which was due on Nov. 10, has been extended to Dec. 10.

“The required time will be taken to conduct a thorough and careful review of this proposed investment,” Paradis said.

Under the Investment Canada Act, a takeover of Canadian companies by foreign WTO-member companies beyond a certain value—set at $330 million in 2012—require a review by the federal government to ensure they’re of “net benefit” to Canada.

The government already extended the initial 45-day review period by 30 days. That extension would have expired on Nov. 10, but the act allows for further extension with the consent of the investor.

The New Democrats have asked Ottawa to reject the $15.1-billion takeover proposal and claim the review process lacks transparency.

They have also expressed concern around a number of issues they say have been left unaddressed, including how Canadian jobs and environmental standards will be affected if the Chinese state-owned oil company takes ownership of a crucial Canadian resource.

NDP Energy and Natural Resources Critic Peter Julian questioned the extension in an interview with CTV News, saying the Conservatives may be planning to quietly announce approval of the takeover in mid-December when people are focused on the Christmas season.

Paradis said the government will make its decision based on the “six clear factors that are laid out in detail in section 20 of the act and the guidelines on investment by state-owned enterprises.”

The government announced earlier this year that the Investment Canada Act is being amended to allow more information to be provided to the public.

The act last underwent a review in 2009, when it was amended to make it possible to reject foreign takeover bids on the grounds of national security, among other changes.

The Falun Dafa Association of Canada has raised concerns about the human rights conduct of CNOOC, saying Canada’s approval of the takeover should be contingent on a guarantee from the company that it will no longer fire, detain, or participate in the ongoing torture and imprisonment of Falun Gong practitioners in China.

This concern has been echoed by Alberta MLA David Swann, who says the decision to allow the takeover should be based on the principles of human rights.

The Canadian Security Intelligence Service (CSIS) has said that some state-owned companies with ties to foreign intelligence agencies or hostile governments could threaten Canadian security if they gain control over strategic sectors of the Canadian economy.

Follow Omid on Twitter: @OGhoreishi
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