Canada extends review of CNOOC’s bid for oil major Nexen

11 October 2012 18:41  [Source: ICIS news]

TORONTO (ICIS)--Canada’s industry ministry has extended its review of the planned $15.1bn (€11.8bn) takeover of oil major Nexen by China’s state-controlled China National Offshore Oil Corp (CNOOC) by 30 days, it said on Thursday.

The ministry added that it may make a decision before 30 days expire, or it may extend the review period again.

Commentators said that Canada is not likely to make a decision before November's US presidential election. Nexen has operations in the US, where some politicians have voiced concerns over CNOOC's bid. In 2005, CNOOC failed in a bid to acquire US oil firm Unocal.

Canada's industry minister has to decide whether the deal, as announced in July, is net benefit for Canada under the Canada Investment Act – the legislation under which foreign takeovers are decided.

In 2010, Canada rejected a bid by Anglo-Australian miner BHP for fertilizer major PotashCorp. Before that ruling 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.

Canada's largest opposition party, the NDP, has called on the government to hold public hearings before deciding on CNOOC's bid, which was approved by Nexen's shareholders last month.

Meanwhile, David Dodge, a former head of Canada's central bank, told media this week that opposition to the deal was "more anti-Chinese than it is anything else because there is every reason to allow this one".

"They are willing to pay, way overpay, how can that not be in our interest," Dodge was cited as saying by Canadian state television and media group CBC.

($1 = €0.78)

By: Stefan Baumgarten
+1 713 525 2653

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