Nov 2 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