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Ottawa has approved the acquisition of Nexen Inc. by China’s CNOOC Ltd.

TODD KOROL/REUTERS

If oil sands companies are losing access to capital because of the government's decision to say no more takeovers by state-owned enterprises, somebody should tell MEG Energy Corp.

Just one business day after the federal government laid out the rules, MEG sold $800-million of shares, enough to fund all its capital spending for next year.

A group of banks led by BMO Nesbitt Burns, Credit Suisse, Barclays Capital and RBC Dominion Securities stepped up to purchase $400-million worth of shares, with the intention of reselling them to the public for $33 apiece. The Caisse de dépôt et placement du Québec subscribed for the rest of the stock offering.

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The government's decision did come at a cost for MEG. The company got about $1 a share less than it would have Friday, as that's about how much the stock lost on Monday. But it's not even clear that all that lost value is the fault of Prime Minister Stephen Harper's government, because the price of oil fell on Monday. In all, that's about a 3 per cent cut. But it got the money.

Now that the rules are in place, look for the capital to start pouring into Canada's energy patch.

One company to watch once again is Encana Corp. The producer has been trying to put together joint ventures to develop some of its gas-producing properties, and they are the kinds of big plays that will need large outlays, potentially from state-owned enterprises.

"It looks to me like game on," said an investment banker at one firm that does a lot of business with mid-size energy producers.

The reality is that the state-owned-enterprise rules, as tough as they sound, would not apply to many deals, if history is any guide.

Natural Resources Minister Joe Oliver says the acquisition of Nexen Inc. by China's CNOOC Ltd. would have had trouble getting through. But of all the takeovers done in Canada in the past five years, it is one of the few that the new state-owned enterprise (SOE) regulations would likely have stopped.

There were roughly 290 acquisitions in the past five years of Canadian companies valued at more than $330-million. That's a very rough proxy for the threshold for a review under the SOE guidelines, which is $330-million of assets. Only about 20 of those deals involved a foreign state-owned enterprise on the buy side.

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Close to half those transactions were takeovers of companies that, while headquartered in Canada, had most or all of their assets outside the country. That group includes the acquisition by a Chinese oil company of Addax Petroleum for almost $9-billion. Those would be unlikely to be held up under the government's plan to stop foreign governments from buying up too much of any one industry in Canada.

Another group of deals were in the energy business, but outside the oil sands. More were joint ventures. You can count on one hand, with fingers left over, the ones that for sure would get a hard look, including oil sands developer OPTI Canada's sale to CNOOC for $2.1-billion.

So no wonder then, that rather than reading the rules as some sort of roadblock, many on Bay Street read them instead as a message that it is business as usual outside of the oil sands. In fact, the added clarity on what is expected of state-owned enterprises that want a deal in Canada ought to make it easier to know what is workable.

Sure, some of it looked tough. The government left the review threshold at $330-million for state-owned enterprise purchases, while sticking to a plan to raise it to $1-billion for other buyers. The idea is that even more state-owned deals would fall under scrutiny.

Except, state-owned enterprises are generally writing big cheques and would be caught even if the limit were to be raised to $1-billion. Only about a half dozen purchases by SOEs for Canadian companies in the past five years fell between $330-million and $1-billion.

"As most oil sands and other significant SOE acquisitions are likely to be well above these thresholds, this change is not expected to result in many more SOE investments being reviewed than before," lawyers at Torys LLP pointed out in a bulletin Monday.

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