The proposed purchase of Calgary-based Nexen Inc., Canada’s 12th-largest energy company, by the China National Offshore Oil Company, CNOOC Ltd., for $15.1-billion (U.S.) should be setting off alarms bells, stated Green Party Leader Elizabeth May, MP Saanich-Gulf Islands.
“This has been described as the largest takeover by a Chinese company in the world, so very serious questions must be raised about the wisdom of such an unprecedented move,” May stated. “We simply cannot allow strategic energy resources to disappear from Canadian control at such a rate and level with no real oversight.”
State-owned CNOOC was the first Chinese company to make a major acquisition in the Canadian oil industry when it purchased a 17-per-cent interest in MEG Energy for $150-million in 2005. Then, in 2011, it expanded by acquiring OPTI Canada for $2.1-billion, giving it 35 percent of key assets like the Long Lake oil sands facility. Nexen controls and operates the remaining 65 per cent of that site.
Foreign control of Alberta’s oil sands has reached a level that could very well be worrying. This year, PetroChina bought out Athabasca Oil Sands Corp.’s remaining 40-percent stake in the MacKay River – and became the first Chinese company to have full ownership of an oil-sands project. Last year, deals included Sinopec’s $2.2 billion purchase of Daylight Energy Ltd., its purchase of 9 percent of Syncrude, and CNOOC’s takeover of Opti Canada.
The Nexen mega-deal was announced almost at the same time as a $1.5-billion acquisition by China’s top refiner, Sinopec Corp., of a 49-per-cent stake in the North Sea operations of Talisman – one of Canada’s top oil and gas exploration companies.
“Chinese investment in Canada’s oil sands is not so much about opening new markets in China for Canadian products as it is about nationalizing our valuable resources by Beijing,” said May. “With investor-state rules, giving corporations even greater power, now under negotiation between the two countries, we may be precluded from implementing more rigorous regulations.
“The prime minister’s eagerness to encourage Chinese investments has already led to gutting of environmental laws in Bill C-38.”
Not all countries are as willing as Canada to hand over their strategic energy interests. In the US, a negative reaction forced CNOOC to withdraw an $18-billion (U.S.) bid for California-based Unocal Corp.
“The Harper Conservatives added the words ‘national security’ to the Investment Canada Act in 2009, but so far they have refused to define it and have rejected expert advice on the matter,” said May. “They haven’t even clarified what they consider to be of “net benefit” to Canada when it comes to selling our non-renewable assets.
“We are losing control over energy ownership and planning as we court multi-billion dollar investments from enterprises intrinsically part of a foreign Communist government with an appalling human rights record.”
Anthony Campbell, former head of the Intelligence Assessment Secretariat of the Privy Council Office, wrote: ‘The servility of Canada’s political leaders…to the obvious manipulations of Chinese strategists who flaunt world trade and financial market principles and jail democracy-promoting authors for 10-year terms is a national disgrace.”
Noting also that a Harris-Decima survey showed that 90 percent of Canadians oppose Chinese companies gaining a controlling interest in or completely taking over a Canadian-owned company, May called for a public inquiry into the Nexen purchase and the status and future of foreign interests in the oil sands.
“I know I’m not alone as I voice my concerns,” May concluded. “This reckless sell-out cannot continue.”