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Canada embracing China’s post-Keystone tar sands bid
China’s bid for a bigger stake in the booming tar sands oil fields of Canada has some American lawmakers flustered, but the deal is likely to be approved anyway by Canadian officials fed up with Washington’s delays on the stalled Keystone XL pipeline.
It’s CNOOC’s second attempt to upgrade its presence in the North American energy market after the Chinese firm dropped a hostile takeover of California's Unocal in 2005 amid concerns from Washington lawmakers that the deal posed a threat to U.S. national security.
“This is a friendly transaction, and that’s different from 2005,” a source close to CNOOC said in an interview. “Both companies want to see this deal happen, and both are working together to get the necessary regulatory approvals. That’s far different from the previous (Unocal) deal.”
The Canadian government still has to approve the deal, but it was brokered by Prime Minister Steven Harper after the Obama administration put the Keystone XL pipeline on hold. The Canadians want partners willing to help them develop the oil-rich tar sands now rather than later.
Canada’s approval process is likely to be fast-tracked, despite complaints from Washington, especially Sen. Charles E. Schumer, New York Democrat, and Rep. Edward J. Markey, Massachusetts Democrat, two lawmakers who want to scuttle the deal unless the Chinese make concessions on opening closed markets.
“We’re going to take a good look at it,” Hon. Rob Merrifield, a member of the Canadian Parliament, said recently during a speech at the U.S. Chamber of Commerce. But the lawmaker made it clear that Chinese investment is welcome in Canada: “We’re going to want more trade with China.”
For the Canadians, more drilling means more jobs and tax revenue.
“They have more money to put behind it,” said the source close to CNOOC.
Mr. Schumer and Mr. Markey have suggested the Obama administration can block the Nexen deal because the Canadian firm has U.S. investments, but analysts say the company is likely to sell U.S. assets if Washington tries to step in.
Losing the inside track on the tar sands oil represents a lost opportunity for the United States to lower domestic energy prices and reduce its dependence on overseas oil, critics of the Obama administration say.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at email@example.com.
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