Politics won't nix Nexen deal: ambassador

Canada's new ambassador to China, Guy Saint-Jacques, denied on Friday that politics is playing a major role in his country's handling of the proposal by a Chinese oil giant to buy Canada-based oil producer Nexen.

His remarks came as media reports said Canada is likely to extend its review of the $15.1-billion bid by China's CNOOC for Nexen beyond next week's deadline. The country also postponed implementation of the China-Canada Foreign Investment Promotion and Protection Agreement.

It's still too early to say if the Nexen deal will be rejected, Saint-Jacques told China Daily during his debut interview with Chinese media.

Saint-Jacques arrived in Beijing two weeks ago to succeed David Mulroney as the new Canadian ambassador to China. Fluent in Mandarin, Saint-Jacques has previously served in Hong Kong and twice in Beijing.

Reuters cited two sources saying on Wednesday that Canada is likely to extend its review of the CNOOC-Nexen deal beyond next week's deadline to allow more time for the government to formulate a broad framework on foreign investment.

Saint-Jacques said he had not heard the report that the deal will be rejected or delayed, and the Canadian government is still reviewing the case and considering the net benefit for Canada.

China National Offshore Oil Corporation, one of three big Chinese State-owned oil companies, has been trying to buy Canadian-based Nexen in a $15-billion takeover.

The Canadian government had earlier put off the deal to Nov 10. Nexen shareholders have already signed off on the deal, but according to Canadian law, any deal worth more than $331 million to take over a Canadian company requires regulatory approval from the Canadian government.

Asked about whether the deal was hijacked by politics, the ambassador said, "I don't think politics plays a big role right now. It's more a question of future development of oil industry in Canada".

The proposed Nexen deal triggered heated discussion across Canada, with some opposition parties opposing the deal, citing CNOOC's State-owned nature.

According to Saint-Jacques, Canada used to have State-owned oil companies, but the government dismantled them in the belief that it's better to let the oil industry be owned by the private sector. The Canadian oil industry has developed rapidly since then.

Some Canadians may have concerns whether foreign State-owned companies should invest in Canada when the country itself has dismantled State-owned companies, he said.

Oil and gas are important to Canada's economy, so some people said these industries should not be developed by foreign investors, he added.

"All the discussions are good What will come out is more transparency about rules, that will help future investment," Saint-Jacques said.

There is so far no official response from CNOOC about the ambassador's remarks, but a senior official at the company, who wanted to remain anonymous, said that it is surely a good sign for the acquisition, but it is still hard to be 100-percent certain.

Liao Na, information director at energy consultancy ICIS C1 Energy, said the main obstacle for the deal is not from the financial or business sectors. Rather, it is affected more by diplomatic and political factors.

She added that there will be clearer indications after the US presidential election, considering the close ties between Canada and the United States both economically and politically.

"On one hand, the Canadian government wants to seek a Chinese alliance to balance the US in North America. On the other hand, it needs time to reach a breakthrough during the process because the worries about China in western countries still deeply exist."

The Nexen takeover is a normal energy transaction between an energy supplier and a buyer, said Xia Yishan, an expert on global energy with the China Institutes of Contemporary International Relations.

It shouldn't be politicized as CNOOC's investment will also benefit Canada's economy.

"The Canadian public still does not have enough understanding about the situation in China, that's why these concerns and criticisms exist," said the ambassador.

"But in fact, lots of Canadian companies support the agreement, because they think the agreement can help them better invest in China."

The agreement was signed by Ed Fast, minister of international trade and minister for the Asia-Pacific Gateway, and Chen Deming, China's minister of commerce, on the margins of the Asia Pacific Economic Cooperation leaders' meeting in Vladivostok, Russia, in September.

It was tabled in Canada's House of Commons on Sept 26 and can be ratified as early as Nov 1. But so far no cabinet meeting has been scheduled to issue the order.

Contact the writers at zhouwa@chinadaily.com.cn and wujiao@chinadaily.com.cn

Du Juan contributed to this story.