Ottawa extends review of Chinese bid for Nexen
Government reviewing CNOOC's $15.1B takeover offer
The Harper government is once again postponing its decision on whether to allow a $15.1-billion takeover of Calgary-based Nexen, Canada’s sixth-largest oil company, by China’s state-owned energy giant CNOOC.
Three weeks ago, the government gave itself a 30-day extension of its review of CNOOC’s bid, moving the deadline to Nov. 10.
On Friday the government asked CNOOC for a further 30-day postponement, and the company agreed.
The new deadline is now Dec. 10.
"Extensions to the review period are not unusual," Industry Minister Christian Paradis said in a statement released Friday evening.
"The required time will be taken to conduct a thorough and careful review of this proposed investment," said Paradis.
There are several other possible reasons for the delay.
First, it may be as simple as Prime Minister Stephen Harper wanting to be on hand for the announcement of the Nexen decision.
The PM will be out of the country next week on an official visit to India, the Philippines and Hong Kong, and is not scheduled to return until two days after the original Nov. 10 deadline.
Second, Harper has promised the government will unveil a new policy "framework" on foreign takeovers at the same time as the Nexen-CNOOC decision.
Reuters news service reported this week that the government has not completed work on the new takeover policy.
The government may also want to finish reviewing another foreign takeover bid, a $6-billion offer by Malaysia’s state-owned Petronas to buy Alberta-based Progress Energy.
The government recently turned thumbs-down on the deal on the basis that it was not of "net benefit" to Canada, but invited Petronas to improve its offering.
The current deadline for those negotiations between federal officials and Petronas is the end of November.
Under the Investment Canada Act, major takeovers of Canadian companies must go through a federal review which examines whether the deal is of "net benefit" to Canada.