Government approves CNOOC-Nexen and Petronas-Progress takeover bids

OTTAWA — The federal government has approved CNOOC’s $15.1-billion takeover of Nexen but has also introduced grittier rules for acquisitions of Canadian companies by state-owned enterprises — including allowing state-owned enterprise takeovers of oilsands companies on “an exceptional basis only.”

The Conservative government also announced Friday it has approved a $6-billion bid from Malaysian national energy company Petronas for Calgary-based natural gas producer Progress Energy Resources.

In making its decision, the Conservative government signalled it welcomes foreign investment, but state-owned enterprises must answer to a different set of rules and that Canada’s natural resources — especially the lucrative oilsands — won’t be raided by so-called SOEs that may have interests beyond commercial objectives.

“Canadians generally, and investors specifically, should understand that these decisions are not the beginning of a trend, but rather the end of a trend,” Prime Minister Stephen Harper said in a statement Friday.

“Investment is critical to our government’s focus on jobs and growth. And Canadians expect that we shall approve foreign investments that are of net benefit to Canada. But all investments are not equal.”

The Harper government spent months reviewing China National Offshore Oil Corporation’s (CNOOC) $15.1-billion proposed takeover of Calgary-based petroleum producer Nexen, and whether the deal offered a “net benefit” to Canada — a broadly defined test under the Investment Canada Act.


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