Canada still examining options on foreign energy bids
By Randall Palmer and David Ljunggren | November 28, 2012 10:35 AM EST
With deadlines fast approaching, Canada is still weighing two proposed foreign takeovers of domestic energy companies, but a top minister offered no clues on Tuesday as to when or how the government would announce the hotly debated decisions.
The government says it will unveil new policy guidelines on foreign investment at about the same time it announces verdicts on the proposed takeovers: A bid by China's CNOOC Ltd for Nexen Inc and a bid by Malaysia's Petronas for Progress Energy Resources Corp.
Although the deadline for delivering a decision on the CNOOC-Nexen deal is December 10, Industry Minister Christian Paradis said officials had not finished their work yet. Paradis is in nominal charge of the file, although few political analysts doubt that Prime Minister Stephen Harper will make the ultimate decision.
"There are (takeover) reviews ongoing that I cannot comment on, but we are working on the policy framework to make sure that, in the future, foreign investment continues to provide net benefit for Canada," Paradis told reporters.
"We'll go out with the reviews, with the guidelines when we are ready to do so. We will clarify what we need to clarify."
The Conservative government is trying to balance the need for foreign investment to develop natural resources with concern that China and other countries could snap up a big chunk of the energy sector and that state-owned companies might not play by free-market rules.
Andrew MacDougall, Harper's chief spokesman, declined to comment on a Business News Network report that Ottawa might want CNOOC to sell Nexen's 7 percent stake in the large Syncrude oil sands joint venture because China's Sinopec has a 9 percent stake in it.
Nexen shares closed 2.3 percent lower at $24.20 in New York, well below CNOOC's offer price of $27.50.
The CNOOC bid featured in the campaign for a parliamentary seat in the center of the oil city of Calgary. No decision came before a November 26 election there and in two other cities, as observers had predicted.
Although December 10 is the deadline for Nexen, investors are also eyeing November 30 after online news service dealReporter quoted Canada's consul general in New York, John Prato, as saying Ottawa would issue the foreign investment guidelines during November.
The Conservative party is divided on what to do about Chinese investment.
In Toronto on Tuesday, Alison Redford, Progressive Conservative premier of the oil province of Alberta, noted that foreign investors once owned 78 percent of the energy patch and the result was that Alberta is now Canada's economic engine.
"It's not something that we are hesitant about," she said of foreign investment.
"We think that if you want to play on the international stage and you have the sorts of resources that we have in Canada, it's important for us to be able to build those business partnerships," she told reporters.
(Editing by Janet Guttsman, David Gregorio and Andre Grenon)
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