Mostly lost in the coverage of the CNOOC-Nexen deal and the clampdown on state-owned companies in the oil sands is the Chinese oil giant's decision to agree to list shares on the Toronto Stock Exchange.
Imposing such a condition to meet the infamous "net benefit" test for foreign investment is a first for Ottawa, says Oliver Borgers, a lawyer with McCarthy Tétrault LLP in Toronto. And it could be a sign that the government will seek similar concessions from other state-owned enterprises looking to make major acquisitions here, he says.
The listing has almost nothing to do with raising capital, Mr. Borgers points out, since CNOOC is swimming in capital already. Very few shares in the $95-billion company will be floated here. Mr. Borgers says it is all about enforcing a level of transparency on CNOOC, making it subject to Ontario's securities regime and requiring it to file annual reports and other disclosure.
Mr. Borgers said Investment Canada officials used to often ask foreign investors whose deals were under review to list on the TSX. But the government rarely insisted on it. Now, at least for state-owned enterprises (SOEs) like CNOOC, this may be changing, he said.
"I think this is going to motivate them to do this more often," Mr. Borgers said of Investment Canada. "Maybe even in non SOE-deals, I don't know. ... They are going to be asked to list, and if they resist, I suspect CNOOC will be used as an example and as a precedent."