China National Offshore Oil Corporation (CNOOC) continues to see its energy push into Canada stagger, as the Canadian government announced late Friday an extension of its review of the Chinese State-owned oil giant's buyout of Nexen Inc, one of Canada's largest energy producers.
"The review period for CNOOC's proposed acquisition of Nexen Inc under the Investment Canada Act has been extended to December 10, 2012," Canada's Industry Minister Christian Paradis said in a statement posted on the ministry's website late Friday.
It marks the second time that the Canadian government has extended the review period for the takeover, after an extension of 30 days announced on October 11. The transaction was announced in July and approved by the Calgary-based oil producer's investors in September, but it still awaits final approval from the Canadian government, as Canada's legal framework makes all major foreign buyout deals subject to government scrutiny.
Calls for comment to the spokesperson for Beijing-based CNOOC, China's top offshore oil and gas company, went unanswered Sunday.
At $15.1 billion, the deal, if completed, would be China's most ambitious move to date to buy out a foreign company. But for the Canadian government, the decision seems difficult.
"The proposed transaction is undergoing a rigorous review under the Investment Canada Act," Paradis said in the statement, which read that "extensions to the review period are not unusual" and may occur again.
"This particular transaction raises a range of difficult policy questions, difficult and forward-looking issues. Those things will all be taken into account," Stephen Harper, Canada's Prime Minister, was quoted by Reuters as saying in early October. CNOOC's bid has concerned Canada's Conservative legislators in particular.
Some market analysts remain optimistic about the deal despite uncertainties raised by the continued extension.
"I saw nothing peculiar in the second extension, as acquiring an energy giant would be a tough mission in whatever country," Lin Bo-qiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times Sunday.
Expressing his view that the deal will not be much impacted by the latest extension announcement, Lin explained, "Canada is hoping to expand its energy exports to markets other than the US. The vast Chinese market appears to be a lure in particular, as the shale gas boom in the US has made Canada worry increasingly over relying too much on oil exports to the US."
Canada remains the largest crude oil supplier to the US, according to the US government figures.
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