In the debate over whether the partially state-owned energy company, Chinas CNOOC, should be given the go-ahead by Ottawa to take over Calgary-based Nexen, there is the danger that the discussion will be cast in an adversarial east-west context.
The recent decision by the federal government to block a proposed takeover of Progress Energy Resources by Petronas, a Malaysian state-owned company, increases the likelihood of a rejection of the pending acquisition of Nexen by CNOOC, a Chinese state-owned oil company. It also follows the federal governments action denying the takeover of Potash Corporation by BHP, a privately owned Australian company. These developments justify reconsideration of whether the net benefit test used by the Canadian government to assess foreign takeovers of Canadian companies makes economic sense.
The proposed sale of Nexen Inc. to China National Offshore Oil Company (CNOOC) is being applauded by some as potentially opening the doors to Asian oil and gas markets and providing an assured source of capital for resource development. On the other hand, some regard it as yet another sale of Canadian petroleum resources to foreign interests that could have serious long-term implications for Canadian energy security.