In this photo released by China's Xinhua News Agency from Oct. 15, 2011, a CNOOC Ltd. oil rig of the Jinzhou 9-3 Oilfield is shown off the coast of Jinzhou, northeast China's Liaoning Province. THE CANADIAN PRESS/AP, Xinhua, Li Yuze
July 23, 2012 - 10:24 AM
OTTAWA - The $15-billion proposed takeover of Calgary-based Nexen Inc. by a Chinese oil producer will put the prime minister and premiers to the test, forcing them to decide how to handle the future of the oil patch.
Ottawa needs to approve the deal before it can go ahead and Industry Minister Christian Paradis is expected to make an announcement later this morning about the process.
But University of Calgary economist Jack Mintz says it will be a tough call for the federal government, which has to decide whether the deal is a net benefit to Canada as a whole, and not just to shareholders.
Mintz says the China National Offshore Oil Company prepared its bid with an eye to regulators by offering a 61 per cent premium to shareholders, and stressing that it intends to keep the Calgary-based management.
But whether Ottawa decides if that arrangement helps Canada as a whole will depend partly on how Alberta sees the presence of a major Chinese player in its midst.
The deal will no doubt throw all the premiers into a tizzy as they meet this week in Halifax to discuss how to craft a national energy policy.
News from © The Canadian Press, 2012