UPDATE 1-Canada extends review of CNOOC-Nexen deal to Dec. 10

Sat Nov 3, 2012 6:12am IST

Related Topics

Stocks

   

Nov 2 (Reuters) - Canada said it has extended its review of a $15.1 billion bid by China's CNOOC Ltd for Canadian energy producer Nexen Inc by a month to Dec. 10.

Ottawa is conducting the review to determine whether a takeover by the Chinese state-owned enterprise would bring a "net benefit" to Canada.

CNOOC launched China's richest foreign takeover bid in July when it agreed to buy Nexen, whose global portfolios include oil sands and shale gas.

"The review period for CNOOC Limited's proposed acquisition of Nexen Inc. under the Investment Canada Act has been extended to December 10, 2012," Christian Paradis, Canada's industry minister, said in a statement.

The extension will give Canada more time to articulate broad guidelines on foreign takeovers of Canadian companies. The government wants to issue the framework at the same time it makes its ruling on the CNOOC proposal.

Under Canadian law, all major foreign takeover proposals are subject to approval of the federal government, which must certify that the deals benefit the country.

Canada blocked Malaysian state oil firm Petronas' C$5.17 billion bid for gas producer Progress Energy Resources on Oct. 20 but rather than completely ruling the acquisition out, Paradis offered Petronas 30 days to make new representations to the government.

The industry minister initially had issued a two-week extension before declaring that the transaction would not benefit Canada - raising doubts over CNOOC's bid for Nexen - but offering the additional 30 days.

The proposed acquisition of Nexen has raised concerns within Canada about allowing a Chinese state-owned enterprise to control domestic resource assets.

On the other hand, Canada may have to try to build bridges with Asian markets that would welcome its energy supplies as the United States, long the largest market for Canadian energy exports, increases its own oil output from unconventional sources. Also, this year the United States rejected an initial application on the controversial Keystone XL pipeline project,

Reuters reported on Wednesday that Canada was likely to extend its review of the CNOOC bid for Nexen beyond the Nov. 10 deadline.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Sino-Indian Ties

REUTERS SHOWCASE

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Fed Policy Meeting

Fed Policy Meeting

Fed could hint on rate-hike plans as it prepares for policy turn  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Sugar Surplus

Sugar Surplus

India to produce surplus sugar for fifth straight year - industry body  Full Article 

Business Sentiment

Business Sentiment

China, Singapore slowdown weigh on Q3 Asia business sentiment   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage