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Cnooc-Nexen Decision Is Probable by Dec. 10, Ambassador Says

Canada will probably decide on Cnooc (883) Ltd.’s bid for Nexen Inc. (NXY) by Dec. 10 and is seeking to clarify rules on foreign investment, the country’s ambassador to China said today.

The government is “fully considering the deal” for which “there is no precedent,” said Ambassador Guy Saint-Jacques at a Canada-China energy conference in Beijing.

“I am confident we will have a decision by Dec. 10,” Saint-Jacques said. “It’s a very important deal and it’s now being fully considered. Stay tuned.”

Canada extended its review of Beijing-based Cnooc’s $15.1 billion takeover of Nexen for a second time on Nov. 2, re- setting the deadline to Dec. 10 and citing the need for a thorough review. The country blocked a C$5.2 billion bid by Malaysian state-run oil firm Petroliam Nasional Bhd. for Calgary-based Progress Energy Resources Corp. (PRQ) on Oct. 19.

Extending the review is “also fair” to Cnooc, as the company will be “assured that it receives full consideration,” the ambassador said. The Canadian government’s decision will mean that “Chinese companies will know better what kind of conditions they have to meet” before proposing a takeover in Canada, he said.

Chinese companies have already invested more than $10 billion in Canada’s oil and gas sector as well as mining, Saint- Jacques said. In previous transactions, Chinese companies took minority interests in Canadian firms, making the deals “easier to address,” the ambassador said.

Canada needs China’s investment to develop its oil and gas resources, and also needs China’s markets to sell those products, he said.

Jim Ellis, deputy minister of Alberta’s energy ministry, said he “is fully supportive” of the Nexen deal, and that he’s “positive” on Cnooc’s chances of approval.

“We are open for foreign investment, and we need foreign investment and we are very supportive to foreign investment,” Ellis said.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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