Canadian regulators on Friday approved China National Offshore Oil Corp's $15.1 billion purchase of Calgary-based Nexen Inc, which explores western Canada's oil-rich tar sands and operates production rigs in the North Sea, the Gulf of Mexico and Nigerian waters.
CNOOC, China's biggest offshore oil producer, announced the planned acquisition in July, and Nexen shareholders overwhelmingly approved it two months later. It is believed to be the most valuable acquisition of a foreign company by a Chinese enterprise.
Friday's ruling follows months of debate in Canada over a Chinese State-controlled company gaining access to strategic energy resources. Sporadic reports said Canadian officials had expressed skepticism about the proposed Nexen takeover, which they stressed could be approved only if it provided a "net benefit" to Canada.
The deal is still undergoing a regulatory review in the United States, regarding Nexen's assets in the Gulf of Mexico. On Nov 27, the two companies announced the withdrawal and resubmission, with changes, of an application to the Committee on Foreign Investment in the US, a panel representing several federal agencies in Washington that reviews sensitive transactions, often for national-security reasons.
"CNOOC has satisfied me that, under existing guidelines, their proposed transaction to acquire control of Nexen is likely to be of net benefit to Canada," Industry Minister Christian Paridis said in a statement.
"To demonstrate that the transaction is likely to be of net benefit," he said, "CNOOC has made significant commitments to Canada in the areas of: governance, including commitments on transparency and disclosure; commercial orientation, including an adherence to Canadian laws and practices as well as free-market principles; and employment and capital investments, which demonstrate a long-term commitment to the development of the Canadian economy.
Paradis said CNOOC will submit to his ministry an annual report on the company's compliance with those standards.