Skip to main content

The Globe and Mail

Streetwise: Don’t expect more China deals until Nexen is cleared up

A Nexen rig in the Knotty Head region of the Gulf of Mexico. Political opposition to Chinese state-owned CNOOC Ltd.’s bid for Nexen is on the rise in the U.S., which licenses rigs to operate in the Gulf.

Dave Olecko/Nexen

Inbound takeovers from China to Canada appear to be on hold while the Canadian government weighs what to do about CNOOC Ltd.'s $15.1-billion bid for oil producer Nexen Ltd.

One banker who works to structure deals for Chinese clients said there are signs that China's government has put the word out not to move on deals in Canada while Nexen's fate is in the air -- ostensibly to ensure that no additional pressure is put on Canadian policy makers. He said files he is working on have gone into limbo while Nexen's fate is determined.

The Nexen deal has sparked some mild controversy, because CNOOC is state-owned and Nexen is a big presence with assets in the oil sands. As The Globe and Mail's Shawn McCarthy reported Wednesday, the Canadian government is trying to use approval for the deal as leverage to try to open up access to Chinese markets for Canadian companies.

Story continues below advertisement

If indeed China Inc. has put transactions into Canada on ice for the time being, the word would have come from the country's economic overseers at the National Development and Reform Commission. The powerful NDRC is the modern form of China's State Planning Commission, and is charged with macroeconomic management and "the overall economic system restructuring," according to the NDRC web site.

Report an error Editorial code of conduct Licensing Options
As of December 20, 2017, we have temporarily removed commenting from our articles as we switch to a new provider. We are behind schedule, but we are still working hard to bring you a new commenting system as soon as possible. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.