OTTAWA Dec 7 Canada on Friday approved CNOOC
Ltd's landmark $15.1 billion bid for Nexen Inc
, but said it would block virtually all new
attempts by foreign state-owned enterprises to buy assets in the
Separately, Canada approved a C$5.2 billion ($5.3 billion)
bid by Malaysian firm Petronas for energy firm
Progress Energy Corp. The federal Industry Ministry
weighed both bids to see if they amounted to a net benefit to
The CNOOC bid was hugely controversial in Canada and raised
rare open discord inside the ruling Conservative Party, where
some legislators opposed the idea of foreign state-owned
enterprises - particularly those from China - buying Canadian
Prime Minister Stephen Harper said the two approvals
announced on Friday marked the end of a trend for the
right-of-center pro-business Conservatives.
"Foreign state control of oil sands development has reached
the point at which further such foreign state control would not
be of net benefit to Canada," he told reporters.
"Therefore, going forward, the minister (of industry) will
find the acquisition of control of a Canadian oil sands business
by a foreign state-owned enterprise to be of net benefit only in
an exceptional circumstance."
Ottawa introduced new rules imposing tough conditions on
state-owned enterprises seeking to invest anywhere in the
The strict new approach will raise questions about how
Canada can raise the C$650 billion investment it says it needs
in the natural resources sector in the next decade alone.
Ministers say much of the money will have to come from abroad
and China is an obvious source.
Harper said Canada was particularly concerned by two
factors: the influence that foreign state-owned enterprises
could have on Canadian industry and the influence that the
country where the enterprise came from had over that enterprise.
In future, he said, state-owned enterprises seeking to
invest in the economy would have to show adherence to free
market principles and address the fact that they are susceptible
to state influence.
Harper went to China in February to promote the idea of the
Asian country buying Canadian oil and also made clear Canada was
open for business.
But given the unhappiness in his own party, he took a
"To be blunt, Canadians have not spent years reducing
the ownership of sectors of the economy by our own governments,
only to see them bought and controlled by foreign governments
instead," Harper said.