October 16, 2012 / 10:55 PM / in 5 years

Canada's Nexen not like Potash Corp - Saskatchewan premier

* Nexen not “strategic” like Potash

* Wall says caution warranted about state-owned enterprise

By Rod Nickel

Oct 16 (Reuters) - A Chinese takeover of Canadian oilsands producer Nexen Inc does not raise the same concerns as a foiled foreign move two years ago on Potash Corporation of Saskatchewan , Saskatchewan Premier Brad Wall said on Tuesday.

But Wall, the Canadian politician whose opposition to BHP Billiton Ltd‘S hostile bid for Potash helped convince Ottawa to block the deal in 2010, said there is still reason to be cautious.

China’s CNOOC Ltd has offered to buy Nexen for $15.1 billion, but the deal still needs to be approved by the Canadian government.

Wall, in whose province Nexen owns part of a natural gas play, has no direct say in the decision, but is well-connected to the federal Conservative government.

“I don’t see a lot of parallels between the two companies (Nexen and Potash Corp),” Wall said in an interview with Reuters. “Potash Corp was a dominant player in the world potash supply whereas Nexen represents a fraction of what’s a pretty important resource, but not nearly in a quantity to be strategic.”

But Wall said Ottawa will also have to consider whether it wants a state-owned enterprise such CNOOC to buy Nexen.

“That might change the net benefit test or at least ask different questions to come to the decision,” he said.

The Canadian government last week extended its review of CNOOC’s bid for Nexen by 30 days, to Nov. 11. The extension, while expected, comes amid a growing furor over alleged Chinese espionage in North America. Some Canadians also fear that a successful CNOOC bid for Nexen could spark a wave of mega takeovers of Canadian energy producers by foreign enterprises.

The oil sands of the Western Canadian province of Alberta are the world’s third-largest oil deposit and Nexen’s portfolio includes operations in the oil sands, as well as shale assets in the province of British Columbia and projects in other parts of the world.

If approved, the CNOOC bid will be the biggest Chinese takeover of a foreign company. The deal is being reviewed under the Investment Canada Act, which allows the government to examine whether a transaction is of “net benefit” to the country.

Wall, who recently visited China, said there also needs to be reciprocal benefits for Canada, allowing more Canadian investment in China.

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