Nexen rejection would send message: China’s consul-general
Canada’s handling of the proposed takeover of Nexen Inc. by China National Offshore Oil Co. (CNOOC) could impact more than that $15.1-billion deal, says China’s consul-general for Alberta.
Yongfeng Liu was in Red Deer on Monday with a delegation from the Calgary Consular Corps. Speaking to the Advocate following a luncheon at Red Deer College, she suggested that rejecting the sale would send a message to other foreign companies pondering investments in Canada.
“It is understandable and reasonable, if Nexen will not be approved, other companies — especially Chinese companies — will review their company’s strategy.
“I don’t think the Chinese companies will go away. They will come. They will invest, but may be more careful.”
Liu said Australia, despite having a smaller economy than Canada’s, has stronger economic ties with China.
“The co-operation between Australia and China went very fast,” she said, noting that many Chinese companies now operate in the Pacific country.
“I think Canada is not totally ready to welcome Chinese companies.”
Canada and China have been trading partners since they established diplomatic relations in 1968. Agricultural commodities, forestry products, minerals and furs have been among Canada’s most common exports to China, said Liu.
“In recent years, our oil companies have been coming,” she said, noting that Prime Minister Stephen Harper and Alberta Premier Alison Redford invited Chinese companies to invest here during separate trips to China earlier this year.
CNOOC announced plans to acquire all of Nexen’s shares in July. The state-owned oil company said it would make Calgary its international headquarters and retain Nexen’s management team and employees.
Canadian Industry Minister Christian Paradis is currently deciding if the deal would be of net benefit to Canada, with the review period scheduled to end on Dec. 10, after two extensions.
In October, Paradis nixed a $5.2-billion agreement that would have seen Malaysia’s state-owned Petroliam Nasional Bhd. (Petronas) snap up Alberta’s Progress Energy Resources Corp. However, the minister gave Petronas 30 days to submit a revised offer, which it did last week.