Only three years ago, China National Offshore Oil Corporation (CNOOC), China’s third-largest national oil company (NOC), launched the largest-ever Chinese overseas takeover bid, offering $15.1 billion to buy Nexen Inc., Canada’s ninth-largest oil company. Together with China National Petroleum Corporation and Sinopec Group, China’s two largest NOCs, and other state-owned financial institutions, Chinese firms invested around $35 billion in Canada’s energy sector between 2009 and 2013, making Canada the destination of one-third of Chinese overseas energy investment in this period (China Economic Weekly, May 13). But the “Great Leap Forward” of Chinese investment in Canada has proven controversial, as evidenced by the intense debate over CNOOC’s acquisition of Nexen in the fall of 2012, and the recent criticism of the company’s oil leaks in Alberta (BNN, September 2).
With the rapid decline of oil prices in the past year and the heavily discounted energy stocks, Chinese equity holdings in the Canadian energy sector have also come under scrutiny in both countries, especially regarding the value and sustainability of some of the large projects. While Canadians continue to argue about the merits of Chinese capital inflow, Chinese companies are reflecting on the costs of investing in a stable market.
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