Industry Minister Christian Paradis, whose portfolio includes reviewing foreign deals, declined to discuss the Cnooc-Nexen deal in detail, saying Cnooc hadn't filed an official application for review. He also steered clear of saying reciprocity was a condition for the deal to go forward. But he echoed comments last week by Canada's Prime Minister, who indicated that such concerns would be part of the process. "What we hope is for Canadian companies to grow, not just here but everywhere in the world where they have opportunities," Mr. Paradis told reporters. "And, as the government, we have to make sure they have the opportunities." The issue has been a focus generally for Ottawa, he said. Canada and China agreed this year to pursue exploratory discussions to strengthen economic and trade relations. "We are negotiating a lot of free-trade agreements, and we have some investment agreements with other countries. We will be pushing this very, very hard," Mr. Paradis said.
Canadian Prime Minister Stephen Harper had been tight-lipped about the review process but indicated last week for the first time that reciprocity could be a topic for discussion. Asked why Canada should approve the Cnooc-Nexen deal amid restrictions that prohibit similar investments in China by Canadian companies, he answered, "you do raise some important questions." The agreement will be measured, "across a range of considerations, including some of the ones you've mentioned," he said. With small capital markets of its own, Canada typically has welcomed foreign investment, particularly in the capital-intensive oil and mining industries. The Canadian government has rejected just two foreign takeover offers, including Anglo-Australian miner BHP Billiton's US$38.6 billion bid in 2010 for fertilizer maker Potash Corp. of Saskatchewan Inc. Two years earlier, the
Harper government blocked U.S.-based Alliant Techsystems Inc.'s US$1.3 billion planned purchase of the space-technology division of Vancouver-based MacDonald,Dettwiler and Associates Ltd.
Reciprocity could be a hurdle for the Cnooc-Nexen deal in the U.S. as well. The deal is subject to Washington's approval because Nexen has oil wells in the U.S. Gulf of Mexico. U.S. Sen. Charles Schumer, a New York Democrat who serves on the Senate's Finance Committee, has asked Treasury Secretary Timothy Geithner not to approve the deal until Beijing makes "tangible, enforceable commitments to ensure U.S. companies reciprocal treatment." A Must Read In The Journal!