Ottawa extends review of CNOOC, suggesting dilemma

2012-11-05 04:24:52 GMT2012-11-05 12:24:52(Beijing Time)  SINA English

By Yuan Yue, Sina English

The Harper government is once again postponing its decision on whether it would allow the takeover of Calgary-based Nexen, by China’s state-owned energy giant CNOOC, moving the deadline to Dec. 10. This comes after the government's 30-day extension of its review of CNOOC’s bid last month.

The postponement is widely expected to reflect the struggles within Harper government, in that it wants the benefits that can be derived from cooperating with China, but fears the objection from the public. The government, therefore, hopes to downplay the sensitivity of the bid with the move. Canadians, either pro or con, are now questioning the government's decision to postpone the bid once and again.

CNOOC proposed to pick up Nexen, the 14th largest oil company of Canada, in July, with 1.51bln dollars. But under Investment Canada Act, deals involving more than C$330 million (US$331 million) must be evaluated by the federal government, and must be of a "net benefit" to Canada.

"It's the second time the Nexen-CNOOC review has been extended," penned Ottawa Citizen on Nov.3, which indicates "the Harper government is torn between its eagerness to court foreign investment and new markets in Asia, and its distaste for government-run companies.

The report by Canadian Television on Nov. 4 says people in support or against the bid have both questioned the government's decision, with the pros discontent about the government's ambiguous attitude. Gordon Houlden, an expert with University of Alberta and a former diplomat to China, regards the government's postponements as sending out a "misleading signal".

In fact, there have been doubts in the overseas investment market as to whether Canada is really opening door to foreign investment. On Oct.20 this year, Canada temporarily blocked Malaysian state oil firm Petronas' C$5.17 billion (US$5.17 billion) bid for gas producer Progress Energy Resources, casting questions over the country's sincerity to "welcome foreign investment". New Democratic Party's energy and natural resources critic Peter Julian, who is against Nexen deal, moved a step further by condemning the government of diverting public attention, and claiming "the politicians would make announcements on a Friday night".

Prime Minister Stephen Harper is scheduled to depart Ottawa for India, the Philippines and Hong Kong from Nov.3 to 11. On the eve of the trip, according to a Reuters report, he warned that Canada could turn down foreign investments if other countries won't demonstrate openness-- that, Reuters commented, is "some of his toughest remarks on foreign investment yet."

The article also quoted officials as saying "Ottawa is particularly eager to see Beijing demonstrate its openness to Canadian investment in China."

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Editor: Yu Runze
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