Canada to take more time on CNOOC takeover

Associated Press Published: November 3, 2012

That decision has raised doubts about whether Canada is open to foreign investment.

Harper's Conservative government also rejected Anglo-Australian BHP Billiton's hostile takeover bid for Potash Corp. in 2010 and the sale of Vancouver-based MacDonald, Dettwiler and Associates' space-technology division to an American company in 2008.

But Harper has lobbied the Chinese to invest in Canada's energy sector and has said foreign investment is needed to develop Canada's vast oil and gas deposits. Turning down CNOOC's bid would harm relations with China.

Some analysts say the CNOOC-Nexen deal will likely be approved because more than 70 percent of Nexen's assets are outside Canada.

Nexen, a mid-tier energy company in Canada, operates in western Canada, the Gulf of Mexico, North Sea, Africa and the Middle East, with its biggest reserves in the Canadian oil sands. It produced an average of 213,000 barrels of oil a day in the second quarter of this year.

Nexen's board approved the takeover in July after CNOOC offered a 62 percent premium on the stock price. Shareholders voted overwhelming to support the deal in September.

In an apparent show of commitment to Canada's interests, CNOOC is pledging to set up a regional headquarters in Calgary, Alberta, where Nexen is based. It also says it will keep the Canadian company's management and projects in place and list shares on the Canadian bourse in Toronto.