* Canada extended review by a month to Dec. 10
* CNOOC chairman says extension no surprise
* CNOOC chairman says confident deal will go through
BEIJING, Nov 9 CNOOC Ltd, China's top
offshore oil and gas producer, said it is confident of winning
regulatory approval from Canada this year for its $15.1 billion
bid for Nexen Inc, even though Ottawa has extended its
review of the deal twice.
CNOOC launched China's richest foreign takeover bid in July
when it agreed to buy Nexen, a Canadian oil and gas
producer. But the success of its bid began to look shaky after
Canada held up Malaysian state oil company Petronas'
$5.2 billion bid for Progress Energy Resources Corp.
Canada has been conducting a review to determine whether a
takeover by the Chinese state-owned enterprise would bring a
"net benefit" to Canada. Ottawa said on Nov. 2 that it had
extended the review by a month to Dec. 10.
The extension was not a surprise, CNOOC Chairman Wang Yilin
said on Friday.
"It is a big acquisition worth $15.1 billion. It would be
our biggest-ever overseas acquisition, and because of the sheer
size of the project, the government and relevant authorities ...
will need to handle large amounts of review work," he said.
"We are fully confident that the deal will succeed," Wang
told reporters on the sidelines of the Communist Party congress
in Beijing. "We expect the transaction to be completed by the
Buoyed by the comments, Nexen shares were up 64 Canadian
cents, or 2.7 percent, at C$24.17 ($24.17) by midafternoon on
the Toronto Stock Exchange. However, they remain well below
CNOOC's offer of $27.50 per share.
Industry sources have said CNOOC's bid might have a better
chance of success compared to the Petronas deal as only about a
quarter of Nexen's assets are in Canada, while Progress Energy's
operations are fully centred in Canada.
A spokesman for Canadian Prime Minister Stephen Harper
declined to comment.
Harper said on Thursday that his government would make
decisions very soon on foreign investment proposals that it is
considering and on the broader framework for dealing with such
Governments are under pressure to maximise control of their
natural resources as a buffer against the rise in commodity
prices over the past 10 years.
While Canada, which has the world's third-largest oil
reserves and is the third-biggest producer of dry natural gas,
is less prone to resource nationalism than its neighbour the
United States, there is growing wariness on Chinese investment.
According to a poll released by the University of Alberta in
October, 64 percent of Albertans opposed Chinese investment in
Alberta in the form of full ownership.
CNOOC is pressing on in its search for overseas assets as it
has only nine years' worth of reserves based on current
production levels - one of the lowest ratios among global oil
Nexen has oil sands and shale gas operations in the province
of British Columbia.