Canada opposition wants public hearings on China’s bid for Nexen

02 October 2012 18:21  [Source: ICIS news]

TORONTO (ICIS)--Canada’s largest opposition party, the National Democratic Party (NDP), on Tuesday called on the government of Prime Minister Stephen Harper to hold public hearings before approving the proposed takeover of oil major Nexen by a Chinese firm.

China’s government-controlled China National Offshore Oil Corp (CNOOC) plans to acquire Calgary-based Nexen in a bid worth about $15.1bn (€11.8bn). 

However, the NDP said that a growing number of Canadians are opposed to the bid, since they are doubtful about the transaction's advantages for the country.

The party called for public consultations, and it called on Harper to clarify the concept of “net benefit” for Canada under the Canada Investment Act – the legislation under which foreign takeovers are decided.

The concept came into doubt after Harper's government in 2010 rejected a bid by Anglo-Australian miner BHP for fertilizer major PotashCorp. Before that, Canada had approved more than 1,600 takeovers since the legislation came into force in 1985. Only one deal, for a satellite technology company, had been rejected for national security reasons.

Political commentators said that a rejection of CNOOC’s bid would harm Harper’s plans to expand trade and investment ties with China. 

Plans include proposals to ship oil and liquefied natural gas (LNG) from western Canada to China and other countries in the Asia-Pacific region, which would reduce Canada's dependence on the US market.

CNOOC, for its part, in 2005 failed in a bid to acquire US-based oil firm Unocal. At the time, CNOOC blamed political opposition in the US. Meanwhile, a number of US politicans have also spoken out against the CNOOC-Nexen deal, media reported.

($1 = €0.78)

By: Stefan Baumgarten
+1 713 525 2653

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