Canada approves the CNOOC-Nexen and Petronas-Progress deals


The shape of ships to load in BC – before they’re likely to load in the GOUSA

Canada will no longer allow state-owned companies to takeover businesses in the nation’s oil sands and will toughen requirements in other industries…after Canadian Prime Minister Stephen Harper approved CNOOC’s $15.1 billion takeover of Nexen and Petroliam Nasional $5.2 billion takeover of Progress Energy Resources.

The deal by Beijing-based CNOOC is the largest ever takeover by a Chinese company, according to data compiled by Bloomberg. It gives the state-owned company a stake in Canada’s largest oil-sands project and the biggest position in the Buzzard oil field in the U.K. North Sea…

“These were difficult decisions” that reflect “the broad views of Canadians,” Harper told reporters. Canada relies on exports for one-third of economic output and counts on energy products for almost one-quarter of those shipments…

The Cnooc-Nexen transaction is the biggest in Canada since Calgary-based Suncor Energy bought Petro-Canada in August 2009 for about $18 billion…

“We’re obviously quite pleased with the decision,” said Michael Culbert, chief executive officer of Calgary-based Progress, by phone. “We know that this has been a difficult decision to make and we don’t take that lightly…”

The acquisition of Progress by Petronas gives the Malaysian state-owned company gas reserves to build a liquefied natural gas export facility along the British Columbia coast at a cost of C$9 billion to C$11 billion, the companies said this week.

Petronas has the world’s largest LNG-producing site in Sarawak, Malaysia, according to its website, and also operates the world’s largest LNG carrier fleet.

All the parties with a stake in either enterprise have signed off – excepting of course the United States.

The Monday morning quarterbacks in Congress who waste endless time and space whining about the failure of Asian firms to invest in US corporations – will call press conferences to put their stamp of disapproval on the deal. The reasoning will run the whole gamut of Cold War crackpot concoctions. Hypocrisy will run rampant. Not so incidentally, that will probably include the White House.

The controversies about exploitation of the Alberta oil sands will be settled by Canadians, sooner or later. That’s the reason for complaints by American enviro groups that Congress doesn’t listen to, anyway.

I find the Petronas purchase and plans more interesting. This takes away the last bit of reliance Canadians had on American pipelines for transmission of their NatGas for eventual export. They’ll end up with a significant chunk of national income while American politicians sit around worrying about electoral politics vs utilizing a product cleaner and cheaper than coal to run our power plants, vs utilizing a product cleaner and cheaper than oil to run over-the-road trucking and maybe even something more than six NatGas Hondas in San Francisco – someday.

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