'Patently unwise' for Canada to reject China money -ex-minister

Wed Nov 14, 2012 1:32pm EST
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* Prentice says investment by state firms won't subside

* Says Canada shouldn't worry about "ethnicity of money"

* Current CNOOC-Nexen decision deadline is Dec. 10

By Jeffrey Jones

CALGARY, Alberta, Nov 14 (Reuters) - Canada should not reject Chinese investments in its oil industry out of hand because China offers an important outlet as Canada seeks to broaden the market for its crude oil supplies, a former government minister said on Wednesday.

Jim Prentice, vice chairman for Canadian Imperial Bank of Commerce and a former member of Prime Minister Stephen Harper's cabinet, made his remarks as Ottawa reviewed the $15.1 billion takeover bid by China's state-owned CNOOC Ltd for Nexen Inc.

Prentice said Canada must remain open for business and realize that much foreign investment will be made by sovereign wealth funds and state-owned enterprises from both democratic and non-democratic countries.

The Harper government has intensified efforts to open up new markets for Canadian oil in China and throughout Asia to reduce reliance on the United States as its sole export market, in hopes of boosting returns for fast-growing oil sands production.