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Canada Needs Oil Links to Asia as Nexen Reviewed, Prentice Says

Nov. 14 (Bloomberg) -- Canada should build oil and gas links to Asia as the government reviews Cnooc Ltd.’s bid for Nexen Inc., said Jim Prentice, vice chairman of Canadian Imperial Bank of Commerce and an ex-industry minister.

“Canada is right now aggressively engaged in diversifying its energy markets with an eye to Asia” because the U.S. is its only customer and is increasing production itself, Prentice said in a speech at the Oil & Money conference in London today. “Saying ‘no thanks’ to the largest new market opportunity, namely China, would be patently unwise.”

Prentice said he doesn’t know if Canada will approve Beijing-based Cnooc’s proposed $15.1 billion takeover of Nexen after extending its review for a second time to Dec. 10. The government should focus on whether Nexen will continue to operate transparently if Cnooc buys it, he said.

“The fundamental point is that the Canadian government should not be –- and, in my view, won’t be –- concerned about the so-called ethnicity of money,” he said.

“The question must instead be whether the capital in question, once lodged in Canada, will adhere to market principles and to North American standards of governance and transparency,” Prentice said. “If so, then it should be welcomed. If not, then the investments should be scrutinized closely and potentially refused.”

Cnooc Chairman Wang Yilin said Nov. 9 he’s confident the deal can be done by the end of the year.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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