Canada extends review of $15.1 bn Cnooc-Nexen deal by a month
03 November 2012
A fortnight after blocking a C$5.17 billion Petronass-Progress Energy deal, Canada yesterday extended its review of the $15.1 billion takeover of Canadian energy producer Nexen Inc by China National Offshore Oil Corp (Cnooc) by a month to 10 December.
"The review period for CNOOC Limited's proposed acquisition of Nexen Inc under the Investment Canada Act has been extended to December 10, 2012," Canada's industry minister Christian Paradis said in a statement.
Paradis had earlier blocked a C$5.17 billion bid by Malaysia's state-owned oil firm Petronas for Calgary-based Progress Energy Resources on the grounds that the transaction did not represent a ''net benefit'' for the country.
Petronas has been given 30 days to appeal or make concessions to the deal.
In late July, CNOOC, China's state-owned company and the country's largest offshore oil producer, launched a $15.1 billion cash bid for Canada's sixth-largest oil producer Nexen. (See: CNOOC making China's largest acquisition with Canada's Nexen for $15.1 bn)
If the deal goes through, it would mark the largest ever overseas hydrocarbon acquisition by a Chinese entity.
The transaction has to be approved by regulators in Canada, the US, the EU (if required) and China.
It also has to be approved by the state government, which must show that the deal will bring in ''net benefit'' to the country.
Nexen currently produces approximately 20,000 barrels of oil equivalent per day in the Gulf of Mexico and is one of the top leaseholders in the deepwater Gulf.