- Atheists’ Easter taunt to Christians: ‘Jesus is a myth’
- Miley Cyrus hospitalized, cancels Kansas City show
- Josh Romney swipes Harry Reid with photo tweet of dad paying taxes — ‘your paycheck’
- Despite Obamacare problems, some Dems want Sebelius to run for Senate: report
- Angry New Yorkers shred gun registrations in deadline day protests
- Uninsured rate dropping faster in places that embraced pillars of Obamacare, survey shows
- Hawaii, D.C. give residents two more weeks to sign up under Obamacare
- Climate change causing fish to lose their minds, researchers say
- Great Britain tops World’s Most Sexist Nation list
- Aaron Hernandez investigated for threatening to kill prison guard
Chinese target Canada’s tar sands oil with proposed purchase of Nexen
A top Chinese oil company is confident its proposed $15.1 billion purchase of Nexen, a Canadian firm, won’t turn into another awkward Unocal debacle, which is still ever-so fresh in their memory.
After the Chinese National Offshore Oil Corporation failed on an attempted hostile takeover of California’s Unocal in 2005, CNOOC was shamed away from doing business in America. Washington lawmakers had expressed concerns that the deal could create national security problems, forcing CNOOC to back out of the deal.
But CNOOC’s rocky relationship with the U.S. Congress hasn’t stopped the state-owned company from realizing its dream of becoming a big player in North American oil. It already owns minority stakes in Canadian firms, and if the proposed deal goes through for Nexen, it will own a majority stake in the Calgary, Alberta-based company.
“This is a friendly transaction, and that’s different from 2005,” a source close to CNOOC said in an interview. “Both companies want to see this deal happen, and both are working together to get the necessary regulatory approvals. That’s far different from the previous (Unocal) deal.”
The Canadian government still has to approve the deal, but the prospects look better north of the border than they did seven years ago in Washington.
Canada’s approval process is also expected to be much quicker than that of the U.S., which has dragged its feet on construction of the Keystone XL pipeline. The Canadian government will consider the impact the aquisition would have on areas such as job creation, taxes, and research and development.
“We’re going to take a good look at it,” Hon. Rob Merrifield, who represents Yellowhead in Alberta for the Canadian Parliament, said during a trip to Washington to speak at the U.S. Chamber of Commerce.
Selling Nexen to China presents several benefits for Canada. First, it’s hard to argue with the 60 percent premium above market value that investors will get paid at the sale price of $27.50 per share.
Canada would also like to see more drilling to take advantage of the tar sands oil, and CNOOC has more resources than Nexen to pull that off. CNOOC, with a market capitalization of $88 billion, is a much bigger company than Nexen at $13 billion — which means it can afford to produce more oil. More drilling in western Canada would likely mean more jobs and tax revenue for the country.
“They have more money to put behind it,” said the source close to CNOOC. “One of the real selling points of the deal in Canada has been that CNOOC has greater financial resources to bring to Nexen’s current Canadian assets that would in the long term result in greater production from Nexen’s current portfolio.”
Some wonder whether this sale will impact production of the stalled Keystone XL pipeline in the U.S.
When it comes to Keystone, business groups and Republican lawmakers have long warned that if the U.S. waits too long to approve the project, Canada will change its mind and ship the oil to China, where energy demand has generally been growing. That would also mean a lost opportunity for the U.S. to lower domestic energy prices and reduce its dependence on overseas oil.
“China’s taking up all of the oil sands,” Rep. Lee Terry, the Nebraska Republican who has been leading the charge to approve Keystone, told “Fox and Friends” on Saturday.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
- Dysfunction, disarray at Homeland Security management cited in IG's report
- GM's Barra to be first woman to run top American carmaker
- Treasury sells last shares in 'Government Motors'
- U.S. businesses reach out quickly to partners in Iran
- General Motors ending Chevrolet sales in Europe to focus on Opel and Vauxhall
Latest Blog Entries
TWT Video Picks
By returning to Christian roots, the nation can achieve greatness once again
- Fuel-filled wings, ability to swarm: Pentagon offers glimpse at future of drone fleet
- Secret U.S. assessments show Afghanistan not ready to govern on own
- CARSON: Recovering Tocqueville's vision of American exceptionalism
- 'Culture of intimidation' seen in Nevada ranch standoff
- GOP writes legislation to deny Attorney General Eric Holder his salary
- WEBER: Obamacare cuts home healthcare for millions of seniors
- PHILLIPS: What did Harry Reid know and when did he know it?
- HURT: Wilson and Obama ... 100 years apart, but so alike
- U.S. Navy to turn seawater into jet fuel
- HHS nominee Sylvia Burwell entangled in MetLife lawsuit
Celebrity deaths in 2014
Top 10 handguns in the U.S.
Chaos as Manhattan building explodes