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After months of deliberation Canada’s Prime Minister, Stephen Harper, has approved CNOOC’s $15.1 billion takeover of Nexen Inc.
The deal will be largest stake in a foreign company that any Chinese company owns, and is all part of China’s overall strategy to secure global oil reserves in order to supply its growing economy into the future. Canada were interested in the deal as a way to diversify energy exports, sending less to the US, and more to Asia; a strategy that Harper had touted as a national priority.
Dan Cheng, a fund manager at Matco Financial Inc., stated that “the talk around town was that these deals would get done. It would have been a surprise if they weren’t approved.”
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Harper took so long to make his decision due to conflicting desires; on the one hand he wanted to boost his nation’s economic relationship with the growing Asian economies, whilst at the same time preventing those same Asian economies from gaining too much of a foot hold in Canadian oil reserves.
Christian Paradis, the Canadian Industry Minister, said that, “we made sure that we would have the best deal that we could to provide a net benefit to Canada. After that, what was important was to go out and clarify the rules for the future, because what we see is a trend: The state- owned enterprises now are getting more and more in the business of the oil-sands.”
Wang Yilin, the chairman of CNOOC, said: “I express my appreciation for Canada’s welcome of our investment. This recognizes the long-term economic benefits for Calgary, for Alberta and for Canada. Our company will also benefit by adding Nexen’s impressive assets and outstanding employees to our worldwide operations.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com