NEWS

Ottawa extends review of Chinese bid for Nexen

11/02/2012 08:49 EDT | Updated 01/23/2014 06:58 EST
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.

Today the government asked CNOOC for a further postponement, as required under the Canada Investment Act, and the company agreed.

The new deadline is now December 10, CBC's Chris Hall reported.

There are several 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.

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