Gloves off in CNOOC-Nexen ‘net benefit’ debate – by Gordon Isfeld (National Post – August 31, 2012)

The National Post is Canada’s second largest national paper.

OTTAWA  – It all comes down to process and benefits. And that’s where the debate over Canada’s foreign investment policy gets messy — and sometimes nasty.
 
The start of Ottawa’s review of a bid by China’s state-owned energy company for Nexen Inc. has sparked another round of political acrimony over who should ultimately control Canada’s resources and who stands to gain or lose.
 
China National Offshore Oil Co.’s proposed $15.1-billion takeover of the Calgary-based oil-and-gas producer has, like others before it, renewed calls for a more open process in reviewing such deals and determining their “net benefit” — a term that has been around as along as the 1985 Investment Canada Act itself, but one rarely explained or understood.
 
Industry Minister Christian Paradis, who on Wednesday confirmed that CNOOC had formally applied for approval of the Nexen takeover, now has 45 days to review the bid under the act, with an option to extend the process by another 30 days, before ruling on the net benefit of the deal to Canada.For its part, Nexen’s board of directors has already approved the purchase, which would extend its relationship with CNOOC. Last year, the Chinese company purchased Opti Canada Ltd. for $2.1-billion, giving it a 35% stake in the Long Lake, Alta., oil sands project operated by Nexen. CNOOC already had a 14% share of oilsands developer MEG Energy Corp., which it acquired in 2005.
 
On Thursday, the gloves officially came off as Canada’s Opposition party accused the Conservative government of holding private, rather than public, talks on the deal — eliciting an equality strong rebuttal from the Industry minister.
 
Prime Minister Stephen Harper and Mr. Paradis “keep saying they will approve the transaction if it benefits Canadians, but all talks are taking place behind closed doors,” said Peter Julian, the NDP’s energy and natural resources critic.
 
“We are looking for transparency and we’re looking for a real process that shows what the net benefit is to Canada,” Mr. Julian told reporters in Ottawa, adding that his party has “not taken a position on it [the CNOOC deal], not yet.”
 
“For weeks we have been pushing the Conservative government to put in place a transparent process. What we saw yesterday [Wednesday] from the minister is that the Conservatives have the intention of doing anything but that,” he said.

For the rest of this column, please go to the National Post website: http://business.financialpost.com/2012/08/30/gloves-off-in-cnooc-nexen-net-benefit-debate/

Comments are closed.