UPDATE 1-Canada extends review of CNOOC-Nexen deal by 30 days
(Adds details on deal, background)
TORONTO, Oct 11 (Reuters) - Canada extended its review of a Chinese state-owned company's $15.1 billion bid for Canadian energy producer Nexen Inc by 30 days on Thursday, giving the government more time to consider the merits of CNOOC Ltd's controversial proposal.
"The proposed transaction is undergoing a rigorous review under the Investment Canada Act," said Christian Paradis, Canada's industry minister, in a brief statement announcing the extension. "The required time will be taken to conduct a thorough and careful review of this proposed investment."
The extension, while expected, comes amid festering concerns about the deal. Many Canadians fear that a successful bid by the Chinese state-owned company could spark a wave of mega takeovers of Canadian energy producers by foreign enterprises.
The oil sands of the Western Canadian province of Alberta are the world's third-largest proven oil reserve. Nexen's portfolio includes operations in the oil sands, shale gas in the province of British Columbia and other assets spread across the globe.
The government must weigh the takeover concerns against the energy sector's pressing need for foreign investment. By some estimates, Canada requires more than C$600 billion ($612 billion) of energy investments over the next decade, and much of it will have to come from outside the country.
CNOOC's proposal, launched in July, carries a higher price tag that any other foreign takeover bid attempted by a Chinese company.
Under the Investment Canada Act, the government is required examine all deals worth more than C$330 million to determine if they will bring a "net benefit" to the country.
The act provides for an initial 45-day review period, which can be extended by an additional 30 days. In some cases, reviews are extended further.
The government last blocked a foreign takeover deal in 2010 when it stunned markets by preventing Australia's BHP Billiton Ltd from acquiring fertilizer producer Potash Corp , which is based in the western province of Saskatchewan.
(Reporting by Euan Rocha; Editing by Frank McGurty; and Peter Galloway)
Keywords: NEXEN CNOOC/CANADA