IN THE NEWS ~ Nexen Deal Approved
December 10th, 2012 - 9:10am
Published | Publié: 2012-12-07
CTV - CTV NEWS
Nexen Deal Approved
LISA LAFLAMME: Good evening. It's a rare Friday after five that the Prime Minister of Canada calls a news conference. But today's Chinese takeover of one of Canada's biggest oil companies was unprecedented. The purchase of Calgary-based Nexen by China's state-run CNOOC was one of two multibillion dollar Asian takeovers in the Alberta oil sands. Stephen Harper gave the okay then immediately put the brakes on future foreign takeovers, saying Canada is open for business but it's not for sale. CTV's Ottawa bureau chief Robert Fife has the details.
ROBERT FIFE (Reporter): After months of delay and debate, Prime Minister Stephen Harper gave the green light to two monster takeovers of the country's oil and gas sector.
STEPHEN HARPER (Canadian Prime Minister): These decisions are not the beginning of a trend but rather the end of a trend.
FIFE: Cabinet approved the Chinese state-owned conglomerate's $15 billion purchase of Calgary-based Nexen, one of Canada's premier independent players in the oil patch. It also gave thumbs-up to a $6 billion takeover of natural gas giant Progress Energy Resources by a Malaysian state enterprise.
HARPER: When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.
FIFE: Worried the oil sands could be gobbled up by other Chinese state-owned oil giants, Harper laid down stringent new conditions.
HARPER: The government of Canada has determined that foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada.
FIFE: From now on, Harper says, Canada will only allow state-owned firms to buy up stakes in the oil sands under exceptional circumstances.
LAWRENCE HERMAN (CD Howe Institute): He's saying when it comes to state-owned enterprises we're not patsies in this country.
FIFE: Had Harper rejected CNOOC's takeover, experts say it would have chilled relations and harmed Canadian business.
GORDON HOULDEN (University of Alberta China Institute): Chinese hate to lose face and there's been a huge public exposure of this deal, both here in Canada, even in China.
FIFE: Polls show 70 percent of Canadians oppose the Chinese acquisition.
PETER JULIAN (Natural Resources Critic): A company like CNOOC that has a poor environmental and human rights record, giving that kind of blank cheque I think is something that most Canadians oppose.
FIFE: Canada's spy agency has raised the red flag on foreign investments by China, but Harper says CSIS had no trouble with this deal.
HARPER: These transactions have been assessed according to that review and do not raise any concerns.
FIFE: For the Chinese, this approval may not be all happiness. They may bristle at the new limitations on buying up more of Canada's oil sands. Lisa.
LAFLAMME: Well, Bob, there are actually some Canadians bristling uncomfortable with the idea of selling off natural resources to a company owned by communist China, so what's in it for Canadians?
FIFE: Lisa, the very senior official told me that this is all about opening up a market of more than one billion people for Canadian businesses and get more jobs at home. Right now officials say Canada has lacked clout with the Chinese. We haven't been able to get them to buy enough Canadian goods, and they're also stopping a lot of Canadian firms from being able to get into the Chinese market. So under these new conditions that the prime minister has set out, they want our oil and they want it badly, and so they may find that there will be exceptional circumstances where they'll be able to buy more of the oil sands but only if they open up the Chinese market to Canadian businesses. Now, the Chinese play a hard game, so we'll see if this strategy works.
LAFLAMME: So no guarantees going in that this tradeoff will pay off, Bob?
FIFE: None at all, but the prime minister I'm told is gambling that this will work.
LAFLAMME: A Friday night surprise. Thank you for this tonight, Bob Fife, in Ottawa.