China Keeps Quite About Harper Banning Anymore Oil Sands Takeover

This article was last updated on April 16, 2022

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China has apparently strategized to keep quiet and not comment on Prime Minister Stephen Harper’s declaration to block any further takeovers of Canadian oil sands companies by foreign government-owned firms.

Commenting for the first time since Harper allowed the $15.1-billion takeover of Nexen Inc. by China National Offshore Oil Corp., a spokesman for China’s Foreign Ministry, Hong Lei, alleged that Beijing “welcomes” Canada’s decision to allow the Nexen deal to finalize. Mr. Lei informed during a press conference in Beijing on Monday, that “we hope the relevant acquisition will be carried out in a smooth manner, so as to bring mutual benefit and profits to both sides.”

Though when Lei was inquired about Mr. Harper’s ban on any foreign state-owned enterprises might specifically be targeted at China, Mr. Lei avoided the question. He replied saying that “I think relevant parties should support the mutually beneficial co-operation between China and Canada.” This avoidance of commenting on Harper’s decision might be motivated by two factors. Firstly, the Chinese might just be actually happy that Nexen takeover was allowed to go ahead. Or, secondly, perhaps China understands that it will never itself allow any Canadian or American state-owned firm to purchase any large Chinese oil firm.

An energy analyst for Hong Kong-based Jeffries investment bank, Laban Yu, alleged that “I’m not surprised” at the silence by the Chinese. He explained saying “anything they say can be thrown back at them pretty quickly. If they say ‘why no more takeovers?’ it can easily be said ‘well you don’t exactly allow foreign companies into your energy market, so take this one [Nexen] and be quiet.’”