The Canadian government has approved the controversial 15.1 billion dollar takeover of oil and gas firm Nexen by China's state-owned offshore oil company CNOOC.Restrictions were placed on any future foreign deals,however.
To be blunt,said Canadian Prime Minister Stephen Harper,Canadians have not spent years reducing the ownership of sectors of the economy by our own governments,only to see them bought and controlled by foreign governments instead.Foreign state control of oil sands assets has reached the point at which further foreign state control would not be of net benefit to Canada.
From now on,state-owned enterprises may only own minority stakes in Canadian enterprises,except in exceptional circumstances.
What we are doing here is preventing a situation which I see developing and have been worried about for a while now,where in the name of an open,globally competitive economy,we could see the transformation of our economy into a state-run economy-just a state-run economy not run by our own government.
Besides the CNOOC deal,Canada also approved the takeover of gas company Progress Energy Resources by Malaysia's state-owned firm Petronas for 5.3 billion dollars.
The CNOOC deal is the Chinese firm's largest offshore acquisition ever.CNOOC is also asking the US government to review its bid for Nexen's Gulf of Mexico assets.
Canada needs about 657 billion dollars of investment in the natural resources sector in the next decade.There were no Canadian bidders for Nexen.
CNOOC made significant commitments on transparency,employment and capital investments in exchange for government approval of the deal.
Nexen,Inc.(NXY),CNOOC Ltd(CEO),Petronas Gas Bhd(KUL:PETGAS)
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