China closing in on huge oilpatch purchase -by Gillian Steward (Toronto Star – September 25, 2012)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Gillian Steward is a Calgary journalist and former managing editor of the Calgary Herald. Her column appears every other week. [email protected]

CALGARY—Will one of the tallest buildings in Calgary soon be emblazoned with the initials of a Chinese state-owned oil company?

That’s just one of the many questions that hangs over the proposed takeover of Nexen, a major oilsands player, by the China National Offshore Oil Company (CNOOC).

In July CNOOC offered Nexen shareholders a 61-per-cent premium on the share price and last week those shareholders decided it was a deal that they simply couldn’t refuse. It was an important step toward completion of the $15-billion deal, China’s largest overseas acquisition to date.

After the shareholder vote, Nexen’s interim president, Kevin Reinhart, assured the media that CNOOC would be keeping all of Nexen’s 3,000 employees. It has also promised to make Calgary headquarters for all its operations in the Western Hemisphere.

But there are no guarantees that CNOOC will not move in its own executives and staff. It might even want to bring in Chinese workers for its oilsands project in northern Alberta.

This is a really big deal in more ways than one. And it is making a lot of people here uneasy, mainly because there are so many unanswered questions. Just last week, Alberta MP Ted Menzies said he is hearing lots of questions and complaints about the deal from constituents.

The Harper government has yet to approve the deal and so far the prime minister hasn’t said much about it publicly. But as the NDP has pointed out, we still don’t know how the government defines a net benefit to Canada in cases like this.

The energy sector is used to multi-million-dollar takeovers. And it is certainly accustomed to foreign ownership. U.S companies have maintained a strong hand in Alberta’s resource development ever since oil was first discovered here just over 100 years ago.

At one time or another Gulf, Texaco, Chevron and Mobil have all had imposing office towers in the heart of Calgary’s downtown core. BP and Shell have been active in the oilpatch for decades. More recently investors from India to Norway have bought into oilsands development in a big way.

For the rest of this column, please go to the Toronto Star website:–china-closing-in-on-huge-oilpatch-purchase

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