Early evening photos of Nexen's Galaxy III offshore rigs with the newly installed fourth platform in the foreground in the North Sea.
Nexen Inc., the 12th largest energy company in Canada, had agreed to a $15-billion takeover by CNOOC - the China National Offshore Oil Company. This marked China's largest foreign acquisition, the most substantial buyout by an Asian firm in Canada, and an alarming story, given that the company is fully owned and operated by the People's Republic of China and its ruling Communist Party.
Nexen shareholders celebrated a 52% increase in the price of their stocks, but what are the implications of this deal for the rest of Canadians? This is a company operated by an often hostile and rogue government, a country actively engaged in market manipulations and a company with a shady record of human rights abuses in its foreign operations - how will this company perform in Canada?
China is one of the world's worst human rights abusers. It's an authoritarian country with a one-party system, where religious minorities are persecuted and ethnic minorities are mistreated. It imposes sharp curbs on freedom of expression, association, freedom of the press, and judicial independence. Not to mention a country with lax energy standards and high levels of pollution, where environmental catastrophes happen regularly and are met with little concern.
And what about CNOOC? Well, the company has been accused of human rights abuses in Burma, where it forced people off their land and refused to pay many of its workers. It is accused of working with narco-smugglers and aiding heroin-trafficking along the Thai-Burma border. It has operations in Uganda, is developing a 2.5-billion barrel oil field in Iraq, and it recently struck a deal to drill in Venezuela, which will add to the $3.1 billion spent buying stakes in nearby Argentina, Bolivia and Chile.
Yes, the Chinese empire is thirsty for oil, at any price, and doesn't seem to care where it comes from. Nexen is just another strategic purchase for its state-run companies on its quest for energy supremacy.
In a free-market economy, it shouldn't matter who owns a company, be it private or publicly traded, so long as it operates commercially and abides by the laws of the land. However, a Chinese state-owned enterprise doesn't play by the same rules. These firms are indistinguishable from the government; their employees interchangeable. They operate for the strategic and geopolitical interests of China.
I'm not opposed to trading with China and selling them our ethical oil. What I am opposed to, however, is selling the means of production to a foreign government. Especially one that rejects our western values of freedom and democracy, and would use our resources to fuel their military, their oppressive state power and their rogue rise to global power.
China shouldn't control the tap for our oilsands. Sure, they promise to play by our rules today, but what if times get tough, if the mood changes, or the recession worsens? Will Beijing still play nice with Canada? Canada will find itself over a barrel.
It would be a strategic mistake for Canada, undermining the integrity of our free markets and the security of the free world. I encourage you to e-mail Prime Minister Stephen Harper and tell him your thoughts, firstname.lastname@example.org.
Tell him to do the right thing and reject this rotten deal. Tell him to stand up for Canada.