Canada extends review of CNOOC's Nexen bid

OTTAWA -- The Canadian government had extended its review of a Chinese oil company's $15 billion takeover of a Canadian oil producer for another month, authorities said Thursday.

Industry Minister Christian Paradis said the review of China National Offshore Oil Corp's bid for Calgary-based oil and gas producer Nexen Inc had been extended for 30 days.

The review could be extended again beyond the 30 days with CNOOC's consent.

And a decision could be made at any time within the period.

An initial 45-day review period was set to end Friday.

"The required time will be taken to conduct a thorough and careful review of the proposed investment," Paradis said in a statement.

Related reading: Nexen schedules vote on CNOOC's $15.1b offer

"The proposed transaction is undergoing a rigorous review under the Investment Canada Act," said Paradis, who added a determination would be made based on six factors outlined in the legislation and the Guidelines on Investment by State-Owned Enterprises.

Before Ottawa gives the green light to the CNOOC-Nexen transaction, the impact of the investment on economic activity and employment in Canada will be considered.

The Canadian government will also look at "the degree and significance of participation by Canadians" in the CNOOC takeover, along with the effect of the investment on productivity and product innovation and on competition within "any industry or industries" in Canada.

Industry Canada, which has the final say, is also reviewing the transaction to determine whether it is compatible with Canadian industrial, economic and cultural policies, and to assess how it contributes to Canada's ability to compete in world markets.

The investment guidelines for State-owned enterprises also call for a net-benefit assessment to examine whether or not CNOOC adheres to Canadian standards of corporate governance - such as its commitment to transparency and disclosure and having independent audit committees in place - as well to what extent China's largest offshore oil and gas producer is controlled by the Chinese government.

Last month, Nexen's shareholders voted in favor of the deal, announced in July.

The takeover bid got a further boost Wednesday when former Bank of Canada governor David Dodge told reporters the proposed acquisition was in Canada's interest and that opposition to it may be "more anti-Chinese than it is anything else because there is every reason to allow this one."