Canada still examining options on foreign energy bids

Tue Nov 27, 2012 6:27pm EST
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By Randall Palmer and David Ljunggren

OTTAWA (Reuters) - With deadlines fast approaching, Canada is still weighing two proposed foreign takeovers of domestic energy companies, but a top minister offered no clues on Tuesday as to when or how the government would announce the hotly debated decisions.

The government says it will unveil new policy guidelines on foreign investment at about the same time it announces verdicts on the proposed takeovers: A bid by China's CNOOC Ltd for Nexen Inc and a bid by Malaysia's Petronas for Progress Energy Resources Corp.

Although the deadline for delivering a decision on the CNOOC-Nexen deal is December 10, Industry Minister Christian Paradis said officials had not finished their work yet. Paradis is in nominal charge of the file, although few political analysts doubt that Prime Minister Stephen Harper will make the ultimate decision.

"There are (takeover) reviews ongoing that I cannot comment on, but we are working on the policy framework to make sure that, in the future, foreign investment continues to provide net benefit for Canada," Paradis told reporters.

"We'll go out with the reviews, with the guidelines when we are ready to do so. We will clarify what we need to clarify."

The Conservative government is trying to balance the need for foreign investment to develop natural resources with concern that China and other countries could snap up a big chunk of the energy sector and that state-owned companies might not play by free-market rules.

Andrew MacDougall, Harper's chief spokesman, declined to comment on a Business News Network report that Ottawa might want CNOOC to sell Nexen's 7 percent stake in the large Syncrude oil sands joint venture because China's Sinopec has a 9 percent stake in it.

Nexen shares closed 2.3 percent lower at $24.20 in New York, well below CNOOC's offer price of $27.50.   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