Canada won promises from China in backing Nexen deal - minister

Sun Dec 9, 2012 4:22pm EST
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By Russ Blinch

TORONTO (Reuters) - Canada wrested "significant" commitments from China's CNOCC on issues of corporate governance and transparency as part of its approval of the acquisition of a swath of Canada's valuable oil sands reserves, Industry Minister Christian Paradis said on Sunday.

Defending the $15.1 billion takeover of Nexen, one of Canada's largest independent oil companies, in the face of grumbles from the left, Paradis said that Canada won "significant undertakings" from CNOOC.

Canada announced on Friday that, after months of study, it would allow CNOOC's $15.1 billion acquisition of Nexen Inc, a controversial ruling given concerns from some in the ruling Conservative party about China's human rights record.

Paradis said CNOOC made promises involving the management of Nexen and that the Chinese company would have report back to the Industry Ministry to ensure conditions are being met.

Canada made "sure that we had significant undertakings in terms of governance, about transparency, about disclosure," Paradis told CTV's "Question Period" program.

Paradis said he could not provide details for commercial reasons.

Under the deal, CNOOC will get full control of Nexen's Long Lake oil sands project in northern Alberta, properties containing as much as six billion barrels of recoverable crude and a 7.2 percent stake in the Syncrude Canada Ltd joint-venture.

The ruling, closely watched by investors, followed months of heated debate over how much of Canada's energy sector, and especially its oil sands, should be absorbed by companies run by other governments.   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