The frenetic M&A action in Canada’s energy sector shows no signs of cooling off, as demonstrated by the $15 billion offer that China National Offshore Oil Corporation (CNOOC ) made on July 23 for Calgary-based Nexen Inc., a major player in Alberta’s oil sands. What may be cooling off is the Canadian governme n t’s enthusiasm for foreign ownership in the sector.
Ottawa announced on October 11 that it was extending its review of the Nexen takeover for 30 days. On October 19 the government blocked a similar dealthe planned $5.2 billion takeover by Malaysian state-owned Petroliam Nasional Berhad (Petronas) of Progress Energy Resources Corp., another Calgary-based Canadian energy power [Canadian Big Deals, September]. The Petronas/Progress rejection shook the Canadian oil industry, and all eyes immediately turned to the CNOOC/Nexen deal, with one obvious question: Could it also fail to win Ottawa’s approval?
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