What are the consequences of foreign companies buying up our oil companies?

[Aznsilvrboy]

One of the bigger news today is that the the state owned China National Offshore Oil Corporation (CNOOC) is buying Calgary's Nexen for $15 billion in cash. This was not the first time a Canadian oil company was acquired by foreigners. Over the past few years, China's state-owned Sinopec, PetroChina and Korean National Oil Company have acquired or assumed large stakes in Canadian oil companies. For example, in 2009 the KNOC bought Calgary’s Harvest Energy Trust for $4.1 billion and PetroChina bought 60-per-cent share of Athabasca Oil Sands Corp.‘s MacKay River and Dover projects for $1.9 billion plus other financing arrangements. Then in 2011, Sinopec bought Canada's Daylight energy for $2.2 billion. The Americans and the British have also been snapping up a few of their own. What do you think the consequences will be? What's the point of having a large reserve of oil when we are losing control of it?

[tsat]

The result will be our natural resources being owned and controlled by foreign interests... Good times

[Piro21]

True impoverished-third-world-resource-exporter status for Canada, just like the government wants.

[manmanny]

One of the bigger news today is that the the state owned China National Offshore Oil Corporation (CNOOC) is buying Calgary's Nexen for $15 billion in cash. This was not the first time a Canadian oil company was acquired by foreigners. Over the past few years, China's state-owned Sinopec, PetroChina and Korean National Oil Company have acquired or assumed large stakes in Canadian oil companies. For example, in 2009 the KNOC bought Calgary’s Harvest Energy Trust for $4.1 billion and PetroChina bought 60-per-cent share of Athabasca Oil Sands Corp.‘s MacKay River and Dover projects for $1.9 billion plus other financing arrangements. Then in 2011, Sinopec bought Canada's Daylight energy for $2.2 billion. The Americans and the British have also been snapping up a few of their own. What do you think the consequences will be? Maybe nothing?
Not much. Its same as Canadian companies own mines in South America or South African Nations.
It can not be one way trade. Unless you are US of A and then its different story.
What I heard is Sinopec is giving much more money and promised on keeping Canadian offices. Not that any company honours them but...

[NorthYorker]

Even more branchplanting. Seriously, by selling resource-extracting companies to foreigners we're just outsourcing best-paying jobs (corporate headoffices) to foreigners and decreasing Canadian input into decision-making about Canadian resources. Contrary to popular delusion, corporation's country of origin does matter, especially for semi-authoritarian societies like China.

[JAC]

I can't believe the government allows the sell-off of our national resources. What happens when China's need for oil reaches the point where they demand all production be directed there?

[NorthYorker]

What happens when China's need for oil reaches the point where they demand all production be directed there?They will need to sort it out with Americans somehow. China's consumption affects our gas prices regardless of ownership of resource companies, so selling Nexen would have zero influence on gas prices we Canadian consumers pay on pump.

[charliebrown]

Folks, Nexen's production isn't 100% Canadian -- they have wells all over the world, i.e. US, Gulf of Mexico, UK, Nigeria.
Looking at their Q2 results, Canada represented 28% of total production -- if we look just at production volumes, the UK could end up being a bigger hurdle (not sure how/if their regulators will rule over foreign ownership of licenses/ offshore wells etc.

Unless the Chinese or Koreans start diverting all their production to trucks/rail cars and ship them on ships directly to Asia, the oil that comes out of a well in Alberta will continue to flow into a TransCanada or Enbridge pipeline, then to a refinery in the US or Sarnia.

[Aznsilvrboy]

Folks, Nexen's production isn't 100% Canadian -- they have wells all over the world, i.e. US, Gulf of Mexico, UK, Nigeria.
Looking at their Q2 results, Canada represented 28% of total production -- if we look just at production volumes, the UK could end up being a bigger hurdle (not sure how/if their regulators will rule over foreign ownership of licenses/ offshore wells etc.

Unless the Chinese or Koreans start diverting all their production to trucks/rail cars and ship them on ships directly to Asia, the oil that comes out of a well in Alberta will continue to flow into a TransCanada or Enbridge pipeline, then to a refinery in the US or Sarnia.

If they own the company, they can do whatever they want. What's to stop them from doing that and cutting everyone else off?

[BananaHunter]

Impact? Probably none. It's not like a Canadian company fundamentally behaves differently from a foreign company. Both are profit driven. Both are going to sell to the highest bidder. It's not like we're giving away the entire supply of oil from this deal. It's the RISK and REWARD of running this business that gets transferred to the Chinese company. It doesn't mean Canada will not be able to have oil or anything...life goes on.

[jjboy]

It's ok for Canadian companies to control natural resources in other countries, but we don't want a foreign country to control our own natural resources. (except for our buddy USA)

[virgilaug]

http://www.youtube.com/watch?v=rNMmVxhZP98

[sandikosh]

Who cares anyway? If someone was offering me $15B for my company, I will sell!

[zz000ter]

If foreigners own all our companies
then profits go to other countries
and we just become wage slaves.

The canadian gov still gets some sort of $ per barrel pumped
no matter who pumps the oil - local or foreign company

Too bad we do not have refineries and other production facilities in Canada to add value to the raw resources

[NorthYorker]

Folks, Nexen's production isn't 100% Canadian -- they have wells all over the world, i.e. US, Gulf of Mexico, UK, Nigeria.
Looking at their Q2 results, Canada represented 28% of total production -- if we look just at production volumes, the UK could end up being a bigger hurdle (not sure how/if their regulators will rule over foreign ownership of licenses/ offshore wells etc.So, 100% of those juicy high-paying Nexen HQ jobs which used to be in Canada will be in China from now on.

[manmanny]

To defend itself, Telus released figures which suggest that it’s 32.59 per cent foreign-owned (http://www.thetelecomblog.com/2012/07/24/no-love-lost-telus-hits-back-at-globalive-over-misleading-foreign-ownership-allegations/), as of June 29. For what it’s worth, the federal limit for foreign ownership in large telcos is 33.3 per cent. The carrier claims that it measures the ownership level on a daily basis to ensure that it’s abiding by the law.
nothing new what china is doing.

[elmst200]

you forgot to mention Malaysian national oil company also purchased a Canadian oil/gas company a couple of days ago.


One of the bigger news today is that the the state owned China National Offshore Oil Corporation (CNOOC) is buying Calgary's Nexen for $15 billion in cash. This was not the first time a Canadian oil company was acquired by foreigners. Over the past few years, China's state-owned Sinopec, PetroChina and Korean National Oil Company have acquired or assumed large stakes in Canadian oil companies. For example, in 2009 the KNOC bought Calgary’s Harvest Energy Trust for $4.1 billion and PetroChina bought 60-per-cent share of Athabasca Oil Sands Corp.‘s MacKay River and Dover projects for $1.9 billion plus other financing arrangements. Then in 2011, Sinopec bought Canada's Daylight energy for $2.2 billion. The Americans and the British have also been snapping up a few of their own. What do you think the consequences will be? What's the point of having a large reserve of oil when we are losing control of it?

[Sharks316]

Who cares anyway? If someone was offering me $15B for my company, I will sell!

sell to CANDIANS!!!!!!!

[omgreo]

The only consequence is that the Chinese state-controlled company now gets a bigger share of the profits and more say in how the company operates.

[Mark77]

So, 100% of those juicy high-paying Nexen HQ jobs which used to be in Canada will be in China from now on.

Yup. Why employ Canadian petroleum engineers, mech/chemicals, drillers, etc., and send them to Yemen, North Sea, Ecuador, etc. -- when they can employ Chinese engineers at the same cost or less.

Just go into most HSBC (formerly "HongKong Bank of Canada") branches in Canada and see what their "foreign" ownership has resulted in, ethnic make-up wise.

Why did this happen? Because Canadians are more obsessed with owning houses on huge amounts of credit, rather than keeping decent valuations for our large businesses.

[desidealer49]

Yup. Why employ Canadian petroleum engineers, mech/chemicals, drillers, etc., and send them to Yemen, North Sea, Ecuador, etc. -- when they can employ Chinese engineers at the same cost or less.

Just go into most HSBC (formerly "HongKong Bank of Canada") branches in Canada and see what their "foreign" ownership has resulted in, ethnic make-up wise.

Why did this happen? Because Canadians are more obsessed with owning houses on huge amounts of credit, rather than keeping decent valuations for our large businesses.

While i agree that Canadian talent needs to thrive, lets not forget that the canadian company owners only care about the best way to screw canadians and make as much money through any means possible. So while they tout about their great Canadian services, they will ship the jobs overseas in a heartbeat if possible and still raise their prices because "we are having it so rough". Whether foreign investment happens or not, jobs will be lost if they see fit.

I find the Canadian corporate landscape to be hugely anti-competitive and monopolistic IMO.