July 24, 2012 / 8:11 PM / in 5 years

Canada PM says CNOOC's Nexen bid to be well scrutinized

OSHAWA, Ontario (Reuters) - Canada will study Chinese oil company CNOOC Ltd’s bid for Nexen Inc carefully and no one should make assumptions about whether the proposed takeover will be approved, Prime Minister Stephen Harper said on Tuesday.

CNOOC announced on Monday it was launching a $15.1 billion friendly bid for Canadian oil company Nexen. The government must now decide under the terms of the Investment Canada Act whether the takeover would be of net benefit to Canada.

“I‘m not going to make comments on this policy either generally or on this specific transaction that would in any way prejudice the government’s position,” Harper told reporters in Oshawa, Ontario, just east of Toronto.

“Nobody should prejudge the government’s position. This investment will be thoroughly scrutinized before it is either accepted or rejected,” he added.

Ottawa is actively seeking Chinese investment to help develop the oil-rich tar sands in northern Alberta but some domestic critics are already unhappy that a state-owned company from China might be allowed to buy a Canadian firm.

The Investment Canada Act places tight restrictions on what officials can say about a takeover bid that is being considered.

In 2010, Harper and other officials commented publicly about a hostile takeover bid by Australia’s BHP Billiton bid for Canadian fertilizer producer Potash Corp, prompting critics to say the government had gone too far. Ottawa eventually rejected the takeover.

Reporting by Julie Gordon, writing by David Ljunggren; Editing by Peter Galloway

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