IN THE NEWS ~ Nexen deal review extended 30 days

THE DAILY GLEANER (FREDERICTON) BUSINESS, Page: D1

RANDALL PALMER and DAVID LJUNGGREN Reuters

OTTAWA - Canada said it needs more time to complete its review of a $15.1-billion Chinese bid to take over oil and gas explorer Nexen Inc., a deal that has raised fears about opening the Canadian energy sector to the Asian power's state-owned companies.

The government on Thursday extended its review of CNOOC Ltd.'s bid by 30 days, to Nov. 11. The decision comes amid a growing furor over alleged Chinese espionage in North America that could intensify opposition to the Nexen deal.

"The proposed transaction is undergoing
a rigorous review," Industry Minister Christian Paradis said in a brief
statement announcing the widely expected extension. "The required time
will be taken to conduct a thorough and careful review of this proposed investment."

A spokesman for CNOOC Canada Ltd. in Calgary declined to comment.

Canada is grappling with concerns that approval of the deal could spark a flurry of mega-takeovers of Canadian energy companies. Canada is home to the world's third-largest proven oil reserves, most of them in Alberta.

Under the Investment Canada Act, Paradis must decide whether the CNOOC-Nexen deal would bring a "net benefit" to Canada. Most analysts expect him to give the green light, with conditions.

Some inside Canada's governing Conservative Party are uneasy about allowing Chinese state-owned companies to buy up Canadian energy assets, accusing them of unfair business practices. Others cite what they say is China's patchy human rights record.

This week a U.S. congressional report urged American companies to stop dealing with two big Chinese telecoms equipment makers, Huawei Technologies Co. Ltd. and ZTE Corp. saying the Chinese companies could enable Beijing to spy on U.S. communications and endanger vital systems.

Public Safety Minister Vic Toews told reporters in Calgary on Thursday that "every transaction that is referred to cabinet is considered from a security and safety point of view."

The CNOOC bid won a vote of confidence Wednesday night from David Dodge, a former Bank of Canada governor. He told reporters Ottawa would retain control over its oil reserves because they will remain in Canada.

The New Democrats - who oppose the deal as it is currently structured - welcomed the 30-day extension and called for public consultations.

"There are still many unanswered questions and it's the Conservatives' job to respond to these questions before selling our resources to the highest bidder," said the party's natural resources critic, Peter Julian.

© 2012 The Daily Gleaner (Fredericton)