Cnooc Ltd.’s $15.1 billion takeover of Nexen Inc. would have been “difficult” under Canada’s new foreign-takeover rules, Natural Resources Minister Joe Oliver said.
The Nexen deal, the largest foreign acquisition by a Chinese company, “would have been difficult because it would have to have been an exceptional situation,” Oliver told reporters in Toronto today.
Prime Minister Stephen Harper introduced new foreign investment guidelines Dec. 7, after approving Cnooc’s bid for Nexen and the C$5.2 billion ($5.3 billion) bid by Petroliam Nasional Bhd., Malaysia’s state-owned energy company, for Calgary-based natural gas producer Progress Energy Resources Corp. The approval of Cnooc’s bid marked the “end of a trend” of oil-sands takeovers by state-controlled companies, Harper said.
The new guidelines, which bar state-owned companies from buying controlling interests in oil-sands businesses except under “exceptional circumstances,” aren’t meant to specifically target Chinese investment, Oliver said.
State-owned companies may have “broader objectives” than private companies to impose political interests upon businesses they operate, he said.
After the Nexen deal closes, foreign governments will control 10 percent of Canada’s oil sands output, Oliver said.
Nexen shares rose 14.1 percent to C$26.57 at 10:28 a.m. in New York