Newspaper article The Canadian Press

Editorial Exchange: End the Nexen Dithering

Newspaper article The Canadian Press

Editorial Exchange: End the Nexen Dithering

Article excerpt

Editorial Exchange: End the Nexen dithering

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An editorial from the Winnipeg Free Press, published Nov. 21:

Prime Minister Stephen Harper should not delay into next year a decision about the Chinese takeover of Calgary-based Nexen Energy Resources. He should not let Canada earn a reputation for procrastination or indecisiveness about foreign investment.

At the beginning of Noovember, the government announced it was extending to Dec. 10 the period for review of the Nexen takeover. The Calgary-based company and the Chinese National Offshore Oil Corporation (CNOOC) announced on July 23 they had agreed on a takeover. Nexen shareholders approved the deal on Sept. 20.

All this time, the federal government has been wondering out loud whether to approve the takeover. Mr. Harper wants to issue clear rules that would govern such cases, but in the meantime, Malaysian national oil company Petronas has offered to buy a smaller Canadian company, Progress Energy, which explores for and produces natural gas. Mr. Harper and his government are eager to promote trade with China and other Asian countries, but giving a Chinese state agency a large role in developing the oilsands is much more than a trade issue. It is also an issue of national sovereignty. The shape and terms of Canada's dealings with China are at stake.

Nexen shareholders eagerly await government approval of the CNOOC takeover. The Alberta government is eager to welcome a new, deep-pocketed player into its oil industry. Canadians hoping for work or spinoff benefits in oilsands development would not easily forgive the government for blocking the deal. But a company that is an agency of China and its ruling Communist Party may be hard to integrate with the market-driven culture of the Alberta oil industry.

The federal Industry department has been negotiating with CNOOC on the terms of the Nexen takeover. According to leaks and echoes from those negotiations, the government is trying to make CNOOC promise stated levels of spending and employment in Canada irrespective of the state of trade and the prospects for a return on the investment. CNOOC is proposing to operate according to the market principles of the commercial world, retaining freedom to reduce spending and employment in response to commercial conditions. …

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