Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, July 23, 2012

China's CNOOC Buys Nexen, Calgary Oil And Gas Firm, For US$15.1 Billion

China's multi-billion-dollar shopping spree in the Canadian oil patch Monday is a sign of more to come as the commodity-hungry country looks to secure energy supplies to feed its economic expansion, experts say.

"China continues to be a very fast-growing country,'' said Fred Ketchen, manager of equity trading at Scotia Capital.

"You can always have (commodities like oil and gas) imported, but somewhere along the line you've got to consider, 'Why would I keep importing this stuff and paying somebody else? Why don't we just buy the place and then we can feed our own treasury?'''

In a blockbuster deal announced Monday, Calgary-based oil and gas producer Nexen Inc. (TSX:NXY) agreed to be acquired by China National Offshore Oil Company (CNOOC) for US$15.1 billion cash.

Meanwhile, Talisman Energy announced it's selling a 49 per cent interest in its UK division to Chinese firm Sinopec Corp. for $1.5 billion.

It's not uncommon for countries like China -- looking to secure commodities -- to look to Canada, said Ketchen.

"We're a natural resource country and we're attractive from that standpoint,'' he said.

Wenran Jiang, an expert on China who advises the Alberta's department of energy, among others, said a lot of attention has been paid to state-owned Chinese outfits -- like CNOOC and Sinopec -- taking an interest in Canada's resources, but private enterprises are also likely to have a look.

"I think we shouldn't lose sight that the Chinese investment in Canada is still at the very early stage, even with the Nexen takeover,'' said Jiang.

"We're not looking at a big, big deal here. We're looking at the beginning.''

Canada has "shot up on the chart'' of Chinese overseas investment recently, he added.

"But still this is a very, very young and small relationship in terms of dollars, total volume of trade. And so we should prepare for more to come and so therefore, the debate, whatever shape it takes, will be healthy.''

The Nexen deal will face a review by both the federal industry minister and the federal Competition Bureau, and observers say the takeover will put the prime minister and premiers to the test, forcing them to decide how to handle the future of the oil patch.

It will be a tough call for the federal government, which has to decide whether the deal is a net benefit to Canada as a whole, and not just to shareholders.

Monday's deals follow other recent Chinese acquisitions in the Canadian oil patch.

Last summer, CNOOC _ one of China's three main state-owned oil and gas producers -- bought a stake in the Long Lake oilsands project when it acquired Opti Canada for $2.1 billion.

Earlier this year, Athabasca Oil Sands Corp. decided to sell its remaining 40 per cent stake in the MacKay River oilsands project to joint-venture partner PetroChina, giving a Chinese oil giant full control of an oilsands asset for the first time.

And last year, Sinopec bought conventional oil and gas-focused Daylight Energy Ltd. in its entirety.

China's economic growth fell to a three-year low in the three months ending in June, growing by only 7.6 per cent over a year earlier. While that's strong by most standards, it is significantly weaker than last year's reading of 9.3.

Although analysts expect the world's second-largest economy to recover, it's unlikely that turnaround will be strong enough to make up for the weak demand from debt-crippled Europe and the United States.

Original Article
Source: huffington post
Author:  Alexandra Posadzki

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