Canada extends review of CNOOC-Nexen deal by 30 days
By Randall Palmer and David Ljunggren
OTTAWA (Reuters) - Canada said it needs more time to complete its review of a $15.1 billion Chinese bid to take over oil and gas explorer Nexen Inc NXY.TO, a deal that has raised fears about opening the Canadian energy sector to the Asian power's state-owned companies.
The government on Thursday extended its review of CNOOC Ltd's (0883.HK: Quote) bid by 30 days, to November 11. The decision comes amid a growing furor over alleged Chinese espionage in North America that could intensify opposition to the Nexen deal.
"The proposed transaction is undergoing a rigorous review," Industry Minister Christian Paradis said in a brief statement announcing the widely expected extension. "The required time will be taken to conduct a thorough and careful review of this proposed investment."
A spokesman for CNOOC Canada Ltd in Calgary declined to comment.
Canada is grappling with concerns that approval of the deal could spark a flurry of mega-takeovers of Canadian energy companies. Canada is home to the world's third-largest proven oil reserves, most of them in the western province of Alberta.
Under the Investment Canada Act, Paradis must decide whether the CNOOC-Nexen deal would bring a "net benefit" to Canada. Most analysts expect him to give the green light, with conditions.
Some inside Canada's governing Conservative Party are uneasy about allowing Chinese state-owned companies to buy up Canadian energy assets, accusing them of unfair business practices. Others cite what they say is China's patchy human rights record.
This week a U.S. congressional report urged American companies to stop dealing with two big Chinese telecoms equipment makers, Huawei Technologies Co Ltd HWT.UL and ZTE Corp (000063.SZ: Quote) (0763.HK: Quote), saying the Chinese companies could enable Beijing to spy on U.S. communications and endanger vital systems. Continued...