Canada's Flaherty: CNOOC-Nexen decision has long-term impact

Fri Sep 14, 2012 10:10am EDT

* Flaherty stresses importance of deal for Canada's future

* Downplays report that he warned against blocking deal

OSHAWA, Ontario, Sept 14 (Reuters) - The Canadian government's decision on whether to allow a $15.1 billion takeover of Canadian oil producer Nexen Inc by China's CNOOC Ltd is important for the future of the country, Finance Minister Jim Flaherty said on Friday.

"The Nexen transaction is going to be, and is being, closely scrutinized," Flaherty told reporters in Oshawa, Ontario. "It's sure important for the future of our country. It deals with natural resources of which, fortunately, there are many in this country, and they're going to be very important for a long time to come."

Flaherty declined to comment when asked to confirm a Globe and Mail newspaper report last month that said he had privately warned his colleagues in cabinet that blocking the CNOOC bid for political reasons would hurt investor confidence and damage relations with China.

"I never comment on rumors. I didn't write this, somebody else wrote that somewhere," he said.

Industry Minister Christian Paradis is reviewing the CNOOC takeover proposal to decide whether it would be of "net benefit" to Canada, a broadly defined test required under the country's foreign investment law.

The review process is unlikely to finish before mid-November.

At least two senior members of Prime Minister Stephen Harper's cabinet are opposed to allowing a state-owned Chinese company to make such a large investment in the country's resource sector, government sources say, while at least one senior minister is leaning toward approval.