OTTAWA Canada's junior finance minister, Ted Menzies, said on Tuesday his constituents in Alberta are split over Chinese state-owned CNOOC Ltd's $15.1 billion takeover bid for Canadian oil producer Nexen Inc, with some backing and others opposing the deal.
The Conservative government, of which Menzies is a member, is deciding whether to approve the CNOOC bid on the basis of whether it is of net benefit to the country. Menzies is a legislator from the oil-rich province of Alberta where Nexen's Canadian assets are concentrated.
The bid has divided cabinet, pitting ministers keen for more investment in the tar sands of northern Alberta, one of the world's biggest crude oil deposits, against those nervous about a Chinese state-owned enterprise buying Canadian assets.
"I've heard many concerns, varying concerns, concerns about the resource industry, concerns about a foreign company investing in Canada," Menzies told reporters when asked what his constituents were telling him.
"We're hearing comments on both sides of the story, many supportive and certainly some that are concerned. What I'm hearing is more concern rather than actually not understanding the issues."
Prime Minister Stephen Harper said last month public opinion would be taken into account when deciding the fate of the bid.
Alberta is the heartland of the Conservative Party, and has 25 of the province's 28 seats in the federal House of Commons.
The opposition New Democratic Party later seized on Menzies' remarks to suggest the government was even ignoring Conservatives.
"This takeover opens up serious questions about ownership of Canada's energy resources. We know the minister (of industry) is consulting thoroughly with lobbyists from CNOOC and Nexen. Why won't he agree to consult the Canadian public for a change?" NDP legislator Peter Julian asked in Parliament.
Industry Minister Christian Paradis responded merely that the transaction "will be scrutinized very closely".
The Conservative co-chair of the Canada-China Legislative Association, Member of Parliament Daryl Kramp, said he does not have a problem with Nexen being bought, though he said he was not privy to all the details, and added he would have a problem if the whole sector were being taken over.
"That's why a strategic review has to occur, and should occur, but I have no problem with foreign investment, just as we have no problem investing in other countries. We live in a global economy these days," the Ontario legislator told Reuters.
He said most Nexen's holdings are outside of Canada and that it would be a stretch to suggest that the company is a dominant player in the Canadian industry.
Investment firms with shares in Nexen are parsing every pronouncement by government members to try to hazard whether the takeover will be approved.
Two relatively outspoken Conservative Alberta backbench legislators said that though they have concerns about the deal, they also reported hearing few worries from voters.
"For me to receive one or two emails, that's not an outcry, that's not popular opposition to this deal," said Brent Rathgeber, who belongs to a wing of the Conservative Party that is wary of forging closer ties with Beijing.
"There are some significant issues with respect to the Chinese government, with respect to the human rights record of the Chinese government, which we're all very, very concerned about, with respect to some of the business practices of Chinese companies generally," he told Reuters.
Rob Anders, another Alberta member of Parliament, said many Conservative colleagues were concerned about the deal.
"I'm never a fan of state ownership of resources, particularly in China's case, because I don't believe it's a benevolent state," he said.
Although the Conservative Party is known for keeping tight control over its caucus members, Anders dismissed the idea he was off-message on the Nexen file: "I think the prime minister and many other people in the room all have some concerns on this and so I think that I'm totally in tune with a lot of people."
When Harper first came to power in 2006 he was suspicious of Beijing and famously said he would not sell out human rights in China "for the almighty dollar". Since then he has changed his approach and now actively promotes closer business ties. He went to China in February to push the idea of buying oil from Canada.
Natural Resources Minister Joe Oliver says foreign investment is needed to fund what he estimates are C$650 billion ($663 billion) of new energy projects over the next decade.
(Additional reporting by Randall Palmer; Editing by Peter Galloway)