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China's $15.1B takeover of Nexen (Canadian Oil sands company)


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One of Nexen's projects ; The Long lake oil sands project

Heated debate from government, business, union leaders to Nexen takeover news

Federal government to review deal

The proposed takeover of Calgary petroleum producer Nexen Inc. by a Chinese state-owned oil company sparked a fiery debate Monday, with the Alberta government welcoming foreign investment as opposition parties, unions and some business leaders urged caution.

Federal Industry Minister Christian Paradis announced Monday that Ottawa will review the China National Offshore Oil Corp.'s (CNOOC) $15-billion bid for Nexen under the Investment Canada Act.

The federal minister will have the final say on whether the takeover goes through, based on if it's deemed a net benefit to Canada.

Although the provincial government has no formal say in the matter, Energy Minister Ken Hughes said the news is further evidence of the importance of Alberta's oilsands in meeting global energy demand.

"Foreign investment benefits Albertans, and Canadians, putting Canadian firms in a better position to compete globally," Hughes said.

"The investment required to develop oilsands resources is significant . . . The result is jobs for Canadians here and abroad, and competitive products on an international market."

The Nexen takeover is not the first Chinese state-owned enterprise foray into Canada, but it's by far the biggest. The $15.1-billion agreement is equal to the amount Chinese firms have invested in Canada's oil and gas industry over the last three years.

The sheer size of the takeover will put Prime Minister Stephen Harper and the premiers to the test, forcing them to decide how to handle the future of the oilpatch, said University of Calgary economist Jack Mintz.

"It's going to be fascinating," Mintz said in an interview.

Debate over the Nexen deal began immediately after the news was announced Monday. Federal NDP energy critic Peter Julian said the Harper government needs to better define the criteria for a foreign sale, and the Nexen takeover should be subject to a transparent review - not decided behind closed doors.

Liberal industry critic Geoff Regan said in assessing the "blockbuster" deal, the Harper government needs to determine whether Canadian companies will be given reciprocal leeway to make major investments in China - and whether the state-owned company will act according to free market principles.

In Alberta, Liberal MLA Kent Hehr said the proposed sale should provoke questions about whether Albertans are losing control of their own resources.

And Alberta Federation of Labour president Gil McGowan said Canadians shouldn't let a company like Calgary-based Nexen, with a major stake in the oilsands, fall into the control of a foreign government without serious reflection.

"They'll keep the best jobs for themselves. They'll do the minimum to protect the environment and ignore Canada's long-term energy needs in favour of their own nation's needs," McGowan said.

But Gordon Houlden, director of the University of Alberta's China Institute, said given the size of the Chinese economy, it would be strange if the Asian powerhouse wasn't investing in Canadian energy companies.

He noted China is still a smaller player than Europe and the U.S. in Canada's oilpatch, but the U.S. will quickly realize it has a robust competitor north of the border.

The Nexen deal is likely to draw comparisons with CNOOC's $18.5-billion bid for U.S. energy giant Unocal in 2005, a tender ultimately beaten down by political opposition on Capitol Hill.

In Canada, the Harper government blocked Australian miner BHP Billiton Ltd.'s hostile bid in 2010 for Potash Corp. of Saskatchewan after political and business leaders lobbied against it.

Dick Haskayne, one of those business leaders, said the onus is on Nexen and CNOOC to prove this latest deal is a net benefit to Canada.

Haskayne, one of Calgary's most prominent energy executives, said Ottawa's decision needs to be shaped by the fact a number of energy companies hammered by the global economic slowdown and low natural gas prices are also ripe for a takeover.

"It's going to be a critical decision," Haskayne said. "It's not just Nexen. If Nexen is approved, you know the other ones that are in the same league."

Haskayne said he doesn't know all the pros and cons of the deal, but one of his key concerns is whether a pledge to keep a head office in Calgary is met.

But businessman Jim Gray, who also opposed the Potash Corp. sale, said it's a good thing Canada is building a closer relationship with the country poised to become the world's largest economy.

The chairman of the energy group of Brookfield Asset Management said he was concerned about Potash Corp. falling into the hands of a foreign entity because the Saskatchewan company controls one-fifth of the global resource.

Control of the oilsands isn't as concentrated, Gray noted. While Nexen is a major Canadian company, much of its assets are located outside the country.

"There's no parallel between those two deals," he said.

http://www.calgaryhe...l#ixzz21ae9Ybr6

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Bad idea.

If people think our oil companies are bad, they should see what the Chinese ones are like.

Also, the company may belong to private investors, but the oil they are pulling belongs to the Canadian state and its people. The profits should go back to Canadians.

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Jesus, what a terrible, terrible idea. Oil sands are already destroying the environment, and we let the Chinese buy all the companies? Guess what happens to environmental laws and regulations now with them in control of a company...

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Guest BuckFoston

Dang, that's a lot of dorrahs. Why the hell is everyone continuing to do business with China?! Boycott the damn place already.

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Bad idea. China has the worst enviromental record in the world and needs to stick to being a consumer instead of altering the landscape to suit it's needs by being a producer.

Take take take until there is nothing left. I don't think so.

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Strongly oppose the takeover. Oils sand are already terrible for the environment and with the Chinese managing things it'll only get worse. Canadian resources should remain property of the Canadians and not in the hands of Chinese who will only use it to make a profit for themselves.

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Tories try to calm concerns over China's slick oil play

1342455583715_ORIGINAL.jpg?quality=80&size=650x

OTTAWA - Prime Minister Stephen Harper says Chinese National Overseas Oil Corporation's (CNOOC) proposed takeover of Canadian energy company Nexen is anything but a done deal.

"Nobody should prejudge the government's decision," Harper said in Toronto on Tuesday. "This investment will be thoroughly scrutinized before it is either accepted or rejected."

Industry Minister Christian Paradis must decide if the Chinese takeover of Nexen is of "net benefit" to Canada.

The minister also appeared to acknowledge the deal is controversial, warning CNOOC and Nexen to do "their homework."

"It's not up to the government to convince Canadians that there is a net benefit, but this is for the stakeholders to do," he said in Montreal.

While Paradis notes the deal must comply with national security law, critics still worry it would give the Communist Chinese government — which owns CNOOC — too large a foothold in Canada's energy sector.

Greg Autry, senior economist with American Jobs Alliance, warns Beijing is "obviously ramping up for war with our allies, like South Korea, Japan, Taiwan, and preparing for war with (the) United States and the rest of the western world."

Joseph Caron, a former Canadian ambassador to China, is less defensive. He says CNOOC is willing to submit to Canadian regulations by listing shares on the Toronto Stock Exchange and planting headquarters in Calgary.

"The more the company is integrated in that regulatory framework, the more checks and balances, if you like, there are on its corporate behaviour," he said.

Caron also says approval of the Nexen takeover would give Canada "strong arguments" as it tries to get Beijing to open up its economy to Canadian investment.

Harper confirmed Tuesday the issue is on his agenda.

"When I deal with Chinese officials, we do regularly raise issues of Canadian investments that exist in China as well as prospective Canadian investments in China," he said.

Meantime, Caron says Chinese investment in Canadian resources is only the latest wave of foreign interest.

"In a few years we may have to get used to the idea of very, very significant investments from India or Russia or Brazil," he said.

http://www.torontosu...-slick-oil-play

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The United States is going to win this battle.

They have done nothing but HOARD all their fossil fuels . They buy up everyone elses and refuse to drill their own. Its just a matter of time until they have most left.

They have more natural gas than the world combined. They have more known coal than the middle east has oil. They have more oil reserves off the coasts , in the gulf , and in Alaska than most countries have combined. They have more Oil shale in the rockey mountains than the middle east has oil.

So they are going to keep sucking everyone elses supply dry , then monopolize the market.

Canada would be smart to ration the amount they export.

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I don't want to see China enrich itself at the expense of Canada, but the people who complain about Chinese environmental record are focusing on the wrong thing. The ownership doesn't matter when the company has to function under Canadian environmental laws. If they don't abide, the company won't have the right to extract resources. Just like if this was an American takeover instead of Chinese. Incidentally, there are plenty of American companies.

Environmental record is a red herring. The real issue is Canada's resources not benefiting Canadians to their fullest.

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The United States is going to win this battle.

They have done nothing but HOARD all their fossil fuels . They buy up everyone elses and refuse to drill their own. Its just a matter of time until they have most left.

They have more natural gas than the world combined. They have more known coal than the middle east has oil. They have more oil reserves off the coasts , in the gulf , and in Alaska than most countries have combined. They have more Oil shale in the rockey mountains than the middle east has oil.

So they are going to keep sucking everyone elses supply dry , then monopolize the market.

Canada would be smart to ration the amount they export.

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I don't want to see China enrich itself at the expense of Canada, but the people who complain about Chinese environmental record are focusing on the wrong thing. The ownership doesn't matter when the company has to function under Canadian environmental laws. If they don't abide, the company won't have the right to extract resources. Just like if this was an American takeover instead of Chinese. Incidentally, there are plenty of American companies.

Environmental record is a red herring. The real issue is Canada's resources not benefiting Canadians to their fullest.

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This is not going to happen. CNOOC is wasting their time. Like the article states. Two years ago BHP Billiton an Australian company launched a hostile take over bid for Potash Corp of Saskatchewan the world's largest producer of potash. They went hostile after Potash told them to piss off repeatedly.

Eventually the government stepped in and blocked the bid saying it did not yield a net benefit to Canada. They will do the same thing this time as they do not need the bad press this will bring. If they didn't allow BHP Billiton to get their way they surely won't let CNOOC have what they want. Allowing this would be a terrible political move.

Short the stock and make some easy dough.

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This is not going to happen. CNOOC is wasting their time. Like the article states. Two years ago BHP Billiton an Australian company launched a hostile take over bid for Potash Corp of Saskatchewan the world's largest producer of potash. They went hostile after Potash told them to piss off repeatedly.

Eventually the government stepped in and blocked the bid saying it did not yield a net benefit to Canada. They will do the same thing this time as they do not need the bad press this will bring. If they didn't allow BHP Billiton to get their way they surely won't let CNOOC have what they want. Allowing this would be a terrible political move.

Short the stock and make some easy dough.

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I don't want to see China enrich itself at the expense of Canada, but the people who complain about Chinese environmental record are focusing on the wrong thing. The ownership doesn't matter when the company has to function under Canadian environmental laws. If they don't abide, the company won't have the right to extract resources. Just like if this was an American takeover instead of Chinese. Incidentally, there are plenty of American companies.

Environmental record is a red herring. The real issue is Canada's resources not benefiting Canadians to their fullest.

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This is not going to happen. CNOOC is wasting their time. Like the article states. Two years ago BHP Billiton an Australian company launched a hostile take over bid for Potash Corp of Saskatchewan the world's largest producer of potash. They went hostile after Potash told them to piss off repeatedly.

Eventually the government stepped in and blocked the bid saying it did not yield a net benefit to Canada. They will do the same thing this time as they do not need the bad press this will bring. If they didn't allow BHP Billiton to get their way they surely won't let CNOOC have what they want. Allowing this would be a terrible political move.

Short the stock and make some easy dough.

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This is not going to happen. CNOOC is wasting their time. Like the article states. Two years ago BHP Billiton an Australian company launched a hostile take over bid for Potash Corp of Saskatchewan the world's largest producer of potash. They went hostile after Potash told them to piss off repeatedly.

Eventually the government stepped in and blocked the bid saying it did not yield a net benefit to Canada. They will do the same thing this time as they do not need the bad press this will bring. If they didn't allow BHP Billiton to get their way they surely won't let CNOOC have what they want. Allowing this would be a terrible political move.

Short the stock and make some easy dough.

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