By Lauren Krugel, The Canadian Press - Monday, February 25, 2013 - 0 Comments
CALGARY – Chinese state-owned firm CNOOC Ltd. is now officially in control of Calgary…
CALGARY – Chinese state-owned firm CNOOC Ltd. is now officially in control of Calgary oil and gas producer Nexen Inc. (TSX:NXY).
CNOOC’s $15.1 billion takeover of Nexen, first announced last July, was completed on Monday, marking China’s largest-ever successful overseas acquisition.
Kevin Reinhart, who had been serving as interim CEO since January 2012, will remain in charge of Nexen’s operations in the oilsands, B.C. shale fields, North Sea, West Africa and Gulf of Mexico.
CNOOC Ltd. CEO Li Fanrong will serve as chairman of Nexen’s new board of directors, which includes members from both the Chinese and Canadian companies.
All of Nexen’s existing assets, as well as CNOOC’s North and Central American operations, will be managed out of Nexen’s Calgary headquarters.
Nexen shares are expected to be delisted from the Toronto Stock Exchange in a few trading days. They will cease being traded on the New York Stock Exchange before markets open Tuesday, and will subsequently be delisted.
The CNOOC-Nexen deal touched off a great deal of controversy about what degree foreign state-owned control of Canadian resources is acceptable.
That the deal came from a Chinese company, in particular, raised concerns in some quarters about doing business with a non-democratic state.
But there was also acknowledgment that Canada does not have the capital necessary to develop its own resources alone, and that overseas investment is needed.
The Conservative government finally decided in December that the deal would be of “net benefit” to Canada under the Investment Canada Act, but that future deals of that type would be held to greater scrutiny.
Ottawa has signalled that deals that give state-owned enterprises control over the oilsands would only be allowed in “exceptional circumstances” from now on, but that partnership deals would continue to bring capital into the sector.
About two weeks ago, Nexen received U.S. government approval.
Earlier Monday, Nexen posted results for its last quarter as an independent company.
Citing impairment charges on natural gas properties in the U.S. and Canada and costs associated with its Long Lake oilsands project, Nexen said its net loss in the three months ended in December was $6 million, or two cents per diluted share.
That was a big reversal from last year’s fourth-quarter profit of $43 million or eight cents per share.
Net sales from continuing operations were $1.58 billion, down from $1.66 billion in the same 2011 period.
For the year as a whole, Nexen said income dropped 52 per cent, which primarily reflected “the impact of higher share-based compensation expense as a result of the increase in our share price in part due to the proposed CNOOC Ltd. acquisition and to lower gains from asset dispositions.”
Last year, net income included pre-tax gains of $386 million from asset dispositions compared to $194 million in 2012.
By Colin Campbell - Wednesday, December 19, 2012 at 8:40 AM - 0 Comments
A monthly scorecard on the state of the economy in North America and beyond
In approving the $15-billion takeover of Nexen Energy by China’s CNOOC, Stephen Harper cautioned that the sale was “the end of a trend.” Foreign ownership in the oil sands is okay, this time, but in the future, state-owned enterprises (SOEs) must be kept at bay, Ottawa ruled. The move was politically astute, but may prove economically dangerous. While attention has focused on whether we should fear SOEs like CNOOC and Malaysia’s Petronas (which also won approval to buy Progress Energy), the really scary question is: what will become of Canada’s oil sands without them?
As investors go, SOEs might not seem ideal. Critics argue they open the door to foreign governments dictating where our oil is sold and at what price. But Canada holds the trump card in the relationship through its ability to dictate royalty and tax rates, as well as labour and environmental laws that SOEs have to follow just like anyone else. Even if they decided to sell oil to China at less than market prices, the loss would be theirs, not ours.
The fact is that SOEs, not just in China but across Asia and the Middle East, rank among the few with the kind of money needed to fuel Alberta’s oil sands, where capital spending alone is expected to climb to more than $200 billion by 2025. They control 70 per cent of the word’s oil reserves, and 13 of the 20 biggest oil companies are state-run. This week, Natural Resources Minister Joe Oliver told the oil sands industry that investment will still flow into Alberta despite the recent ruling. Yet SOEs have been providing the bulk of the funding recently. Chinese SOEs have now sunk more than $25 billion into Canada’s energy sector since 2009. Ottawa is stressing that investment by SOEs is still welcome, just not ownership—not exactly an arms-open invitation.
By Andrew Coyne - Monday, February 21, 2011 at 6:00 AM - 28 Comments
Those old Canadian devils—fear of foreigners, a vacuum of national leadership, petty provincialism—are conspiring to rob us
This is, as it is often said, Canada’s moment. Relatively unharmed by recession, with the soundest public finances and strongest banking system in the developed world, we have a historic opportunity to discard once and for all our self-image as a small country, and join the front ranks of global economic powers.
And yet, we’re in danger of blowing it. With the world at our feet, at the very instant we should be pressing our advantage, we seem instead to have decided to turn inward. Those old Canadian devils—fear of foreigners, a vacuum of national leadership, petty provincialism—are conspiring to rob us of our place in the sun.
All three were very much in display in the Potash fiasco, in which the premier of a province with three per cent of the country’s population was able to bend the government of Canada this way and that like a voodoo doll, merely by uttering the incantation “strategic asset”—as if a resource buried thousands of feet below the ground could be made to disappear at the stroke of a pen. Or as if a majority foreign-owned company headquartered in Chicago was somehow a jewel of national pride and identity.
By Aaron Wherry - Thursday, October 21, 2010 at 6:58 PM - 0 Comments
The Scene. As he made his first intervention, Michael Ignatieff insisted on staring down Stephen Harper’s empty chair. Perhaps it’s to the point now that the Liberal leader sees Mr. Harper’s dismissive mug wherever he looks. Perhaps he simply found the green felt of the House seats a soothing sight to gaze upon.
His question this day had to do with the potential sale of Potash Corporation of Saskatchewan Incorporated to BHP Billiton Limited and all of the national, economic and social implications within and around that transaction. “Mr. Speaker,” he said, “yesterday when the Prime Minister was asked about the possible sale of Potash Corp he basically shrugged his shoulders and said ‘Australia, America, who cares?’”
In full, the Prime Minister had said, “This is a proposal for an American-controlled company to be taken over by an Australian-controlled company.” Whether Mr. Harper was shrugging at the time, I do not remember. But given that he is given to shrugging reflexively at almost all propositions, it is certainly a distinct possibility. Continue…
By Andrew Coyne - Monday, September 6, 2010 at 8:04 AM - 0 Comments
COYNE: A willingness to cash in shows a focus, not on past glories, but on future opportunities
You knew from the start who would lead the opposition to BHP Billiton’s $40-billion takeover bid for Potash Corp. of Saskatchewan. It would be the same crew who always raise the alarm over any foreign takeover, even one from so unmenacing a direction as Australia.
Sure enough, within days, there they all were: the Council of Canadians (“We need a federal public inquiry, not just on this takeover but on the takeover of Canadian mining companies in general”), the United Steelworkers Union (“the most recent economic jewel swept up in the relentless surge of foreign takeovers”) and . . . the Globe and Mail?