Canada ministers meet as CNOOC-Nexen deadline looms

Fri Dec 7, 2012 3:18pm EST
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By David Ljunggren

OTTAWA (Reuters) - A powerful Canadian cabinet committee which has been studying CNOOC Ltd's $15.1 billion bid for domestic oil producer Nexen Inc met on Friday as the deadline loomed for Canada's ruling on the proposed Chinese takeover.

Ministers who attended the morning meeting offered no clues on their agenda, or on whether CNOOC had been under discussion. But the government has until the end of December 10 to deliver its verdict on a bid that triggered a rare divide inside the ruling Conservative Party, where some legislators are wary of letting a Chinese state-owned enterprise buy Canadian energy assets.

If the deal is approved, it will be the largest successful foreign takeover by a Chinese firm.

Although the Canadian cabinet has no formal role in approving the deal, a powerful subcommittee chaired by Prime Minister Stephen Harper is following the affair closely.

Asked what topics were on the agenda, Indian Affairs Minister John Duncan replied: "There's only one."

Ministers were tight-lipped as they left the meeting. Industry Minister Christian Paradis is in nominal charge of deciding whether to approve the bid, but political officials and observers have no doubt that Harper will have a very large say.

Rejecting the deal could be embarrassing for Harper, who went to China in February to promote the idea of China buying Canadian oil and to press the message that Canada was open for business.

Canada says the natural resources sector needs C$650 billion ($660 billion) of investment in the next decade alone and much of the money will have to come from abroad.   Continued...

A logo of China National Offshore Oil Corp (CNOOC) is seen at the top of its headquarters in Beijing November 14, 2012. REUTERS/Petar Kujundzic