8 Dec 2012

Sale of oil company approved by Canada

12:55 pm on 8 December 2012

Canada has approved the sale of the Nexen oil company to CNOOC of China, but said any such future takeovers would likely be blocked.

Nexen shareholders approved the $US15.1 billion deal in September, but final backing was needed from Ottawa.

The BBC reports there are concerns in Canada that the sale will give China too much influence over the domestic oil industry, which is centred in Alberta. The deal is China's largest foreign takeover.

"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada,'' said Prime Minister Stephen Harper.

"Therefore ... the minister (of industry) will find the acquisition of control of a Canadian oil sands business by a foreign state-owned enterprise to be of net benefit only in an exceptional circumstance."

In a separate announcement, the government also cleared the takeover of Progress Energy Resources by Petronas of Malaysia for $US5.5 billion.