Harper’s CNOOC/Nexen deal pushes Canada closer to becoming a China-dominated petro-state

by: Obert Madondo  | Published Oct. 12, 2012

Harper-China FIPA DealThanks to our petro-Prime Minister Stephen Harper and the Conservatives, Canada is on the verge of becoming a China-dominated petro-state.

Last Friday, the Harper Government approved the $15.1 billion takeover of Nexen Inc., a Calgary-based Canadian energy company, by the China National Offshore Oil Co. (CNOOC), a state-owned Chinese company.

This deal, rejected by the majority of Canadians and condemned by the New Democrats and experts, edges Canada closer to becoming a fully-fledged petro-state. One whose lucrative energy sector is dominated and exploited by China through its state-owned companies. One whose national security is vulnerable to the desires and designs of the communist state.

“When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments,” Harper said at a news conference in Ottawa Friday. Not for sale? Really.

The CNOOC/Nexen deal is the largest foreign takeover in Canada’s history.  But only the biggest of many. The Chinese government now owns a large chunk of Canada and our lucrative but environmentally-destructive tar sands. Also on Friday, Harper approved a $5.2-billion take over of Calgary-based Progress Energy Resources by Malaysia’s Petronas. Recently, another Chinese company, Sinopec, completed a $2.2 billion acquisition of Daylight Energy Ltd (now Sinopec Daylight Energy Ltd). Yet another Chinese energy behemoth, Petro-China, a subsidiary of China National Petroleum Corp., recently acquired a large chunk of the Athabasca Oil Sands Corp.’s MacKay River tar sands project.

The Harper Government is about to sign the so-called Foreign Investment Promotion and Protection Act (FIPA) deal with China, which effectively locks Canada for 31 years into a trade agreement that allows state-controlled Chinese corporations to sue Canada for millions of dollars should they feel that our policies interfere with their pursuit of profit.

Then there is the threat to Canadian security and sovereignty. In a recent annual report, the Canadian Security Intelligence Service (CSIS), Canada’s national intelligence organization, warned that foreign takeovers such as the CNOOC-Nexen deal “can pose a threat to national security” to Canada. In 2005, the Americans opposed, on national security grounds, CNOOC’s $18.5 billion bid to purchase refiner Unocal Corp. of El Segundo, Calif.  Last summer, U.S. Republican Senator James Inhofe said of Chinese state-owned companies: “I have serious national security concerns with the Chinese government, acting through one of its corporations, purchasing a company that will give it control over significant U.S. oil and gas resources.”

Read about U.S. scrutiny of Cnooc-Nexen deal.


Of course the CNOOC/Nexen deal is a reflection of Harper’s strange appetite for pimping Canada to foreign and Big Oil interests. And his determination to further weaken our democratic institutions, processes and values. A report released last week by the Ottawa-based Polaris Institute argues that Big Oil is already severely undermining our democracy. The report entitled “Big Oil’s Oily Grasp – The making of Canada as a Petro-State and how oil money is corrupting Canadian politics” found that six main oil industry players, including Enbridge and TransCanada, met with federal cabinet ministers 53 times between September 2011 and September 2012.

This is the period when the Conservatives’ business-friendly Bill C-38, which primarily seeks to gut environmental protections, was being designed.  According to environmental advocacy group, Forest Ethics, “Nexen is one of the backers of Enbridge’s universally-condemned Northern Gateway pipeline.”

“The amount of face time the oil industry gets in Ottawa in personal meetings and other correspondence greatly exceeds the time afforded other major industries in Canada,” said report co-author Daniel Cayley-Daoust. “No one doubts the hold the oil industry has on this current government, but it is important Canadians are aware that such a high rate of lobbying to federal ministers has strong policy implications.”

Another insult here is that Harper wants the gullible among us to believe that the CNOOC/Nexen deal is of the rare, “equal friends with equal benefits“, type. Last May, Forest Ethics reported that data from Bloomberg had revealed that 71% of Canada’s tar sands production is now owned by foreign interests. Last time I checked, foreign-owned state companies send profits back home.

Finally, in dictator-ship style, the CNOOC/Nexen was deal was struck behind closed doors, with neither public input nor parliamentary oversight.  No doubt, the Conservatives are determined to shield Canadians from CNOOC’s appalling business, labor and related records.  The Toronto Star gives some disturbing insights:

 • In 2004, the U.S. Treasury Department reported that CNOOC had entered into a joint venture in Myanmar with a company “run by a family notorious for heroin trafficking.”

• In 2007-08, CNOOC allegedly clashed with its Myanmar workers over low wages, long working hours and other mistreatment of “inhabitants,” concerning “environmental contamination, land confiscation” and other unspecified “human rights abuses.”

• CNOOC is said to have persecuted its Falun Gong workers, collaborating with the PRC in sending them to “labour camps, brainwashing centres, decreasing their pay, and prohibiting them from receiving benefits or regular wages if they refused to give up their beliefs.”

• CNOOC’s operational accidents last year are alleged to have involved a large oil spill in its Penglai oilfield operation (a joint venture with ConocoPhillips), as well as an explosion in one of its oil refineries in Guangdong province close to a nuclear facility.

• A portion of Moody’s assessment rating refers to CNOOC’s weak “stand-alone credit profile” and the “execution risks” associated with uncertainties about “the retention of Nexen’s management and operating expertise.”

Frankly, for how long should we stand aside and watch as Harper turns Canada into a petro-state? What would it take us to transform our bottled anger into transformative, peaceful and revolutionary action?


Obert Madondo is an Ottawa-based progressive blogger, and the founder and editor of  The Canadian Progressive. Follow him on Twitter.com/Obiemad 

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Obert Madondo

Publisher and editor
Obert Madondo is an Ottawa-based independent journalist and progressive political blogger. He's the publisher and editor of The Canadian Progressive.