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Canada to block more sales of oil sands to China

Published December 11. 2012 4:00AM

Toronto - Canada's prime minister said Monday it's "extremely unlikely" his government will allow any more foreign takeovers in the oil sands sector by state-owned companies.

Prime Minister Stephen Harper's Conservative government approved China's biggest overseas energy acquisition on Friday, a $15.1 billion takeover by Chinese-state owned CNOOC of Canadian oil and gas provider Nexen. Harper also approved a smaller deal, Malaysian state-owned oil firm Petronas' $5.2 billion bid for Progress Energy.

But Harper vowed Friday reject any further foreign takeovers in the oil sands by state-owned companies unless there are "exceptional circumstances." He didn't elaborate.

On Monday he went even further.

"I think we have been very clear that controlling interest takeovers by foreign governments in the oil sands are extremely unlikely to be approved by this government in the future," Harper said in Parliament.

Natural Resource Minister Joe Oliver also stated Monday that foreign control in the oil sands sector by state-owned companies has reached its limit. He said CNOOC's takeover likely would not have been approved under new tougher new foreign investment rules.

Concerns had been raised that the approvals could lead to a flood of foreign takeovers that put control of Canada's vast energy resources in China's hands.

Harper said the markets and Canadians are supportive of Canada's new rules.

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