Quote:
Originally Posted by bizaro86
http://www.cbc.ca/news/business/stor...723-nexen.html
Any thoughts on what affect this will have on Calgarians? Jobs, real estate, etc. Will the feds allow this to go through or will it get blocked like the Potash deal? I'd also be interested to know what they're doing for retention of employees.
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Calgarians have been benefiting from foreign national interests buying assets at discounted prices during the entire economic downturn. That's in terms of jobs and support on stock prices on the basis of takeover/JV speculation.
We have had Chinese, Middle East, South African, Korean, and other interests buying in Alberta for years, and it is just picking up. The Chinese in particular have been more pragmatic because they have deeper pockets, greater demand for the resource, and place far more strategic importance on these assets. There is a longer term vision that goes beyond a few fields here and there. Canada is not the only place they are active, and producing the resource is not the only interest they have. They want to find other ways to ensure their manufacturing, research and skilled labour demand stays high, for instance. As an example, they will be finding ways to use as much "made in china" product at future facility installations as possible. They want to own Canadian engineering firm capacity to give a foothold for more work to domestic engineering, and to deploy the results from those designs to other fields globally. Etc.
It is also interesting that CNOOC, Sinopec and CNPC all act independently when doing these deals. I can tell you that with CNOOC closing this big deal in two stages, it embarasses and puts pressure on those working at Sinopec and CPNC to follow suit.
Personally, I don't think this deal gets blocked, and I agree with the reasons already posted. The potash deal was specifically sensitive due to the importance that company holds for the economy and culture of Saskatchewan. Nexen is a big company, but they do not define Alberta's economy or employ a significant percentage of our population. They've also learned from the failure of the Unocal deal, and the success of others... not only where, but how to do business.
When someone says its not fair that the Chinese are able/allowed to do this, that they don't play by the same rules. That is a load of crap. If, for example, Exxon had the financial resources that the Chinese have, you can be assured they would probably as agressive or even moreso in their acquisitions. Its not just financial resources, its human resources they have. They employ millions of people in those three companies, it is just insane... Are those people suggesting that the Rockefeller run Standard Oil shouldn't have been busted up as a monopoly so they could have been more integrated with government than they already are and been able to "compete" in a "more fair" fashion with the likes of other foreign governments? I don't know... our culture and government needs to do what works for us, and have to understand that other places will do things differently. Not everyone can or should be the same.
The only thing that I am adament about on these deals is the regulation of operations and strict observance of qa/qc practices on materials used, fabrication and installation of facilities, and then controls in place during ongoing operations. It truly is a mind shift to be operating in Canada for the Chinese. They are used to doing what they want, where they want, and when they want to do it. BUT they are definitely a very mindful set of companies and will play by the rules that they have to in order to meet their objectives. So we need to be firm on what those rules are, and... quite honestly I think it will work out for both sides in the long run.