In May 2014, the Minister of Industry issued a net benefit
approval for PTTEP's acquisition of control of the Thornbury,
Hangingstone and South Leismer oil sands projects from Statoil
Canada. PTTEP is a Thai state-owned enterprise for purposes of the
By way of background, in December 2012 the Prime Minister and
the Minister of Industry issued new and revised guidance in relation to
State-Owned Enterprises. In relation to the oil sands,
the relevant policy provides that acquisitions of oil sands
businesses by SOEs will only be approved in exceptional
circumstances. The PTTEP acquisition is significant because
it represents the first test of this policy.
As we previously discussed, the
revised SOE guidance was issued the day the Government approved
CNOOC's $19 billion acquisition of Nexen, the largest
state-owned takeover in Canadian history. Since that day, there has
been extensive debate in media, policy, business and legal circles
in relation to the future of state-owned investment in Canada.
Meanwhile, in June 2013, the Investment Canada Act itself was
amended to include expansive provisions aimed at
giving the government greater discretion in relation to reviewing
investments by SOEs.
Despite the concerns for the government's guidance, it is
important to note that several state-owned acquisitions of control
have been approved since the CNOOC / Nexen approval was issued. As
counsel for CNOOC in 2012, CQ Energy Canada Partnership in 2013 and
PTTEP this year, we at Stikeman Elliott have witnessed first-hand
the fact that obtaining approvals for state-owned enterprises under
the Investment Canada Act will continue to be achievable
in cases where transactions are structured appropriately and with
regard to the government's policies. To that end,
clear-sighted, strategic guidance from experienced counsel is
required to mitigate regulatory risk and manage the approval
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