Yukon explorer CNOOC seals tar sands deal

The Chinese state-owned oil giant now working in northern Yukon is poised to become a big player in Alberta’s tar sands.

The China National Offshore Oil Corporation, or CNOOC,  just got the go-ahead from Ottawa to take over Nexen, a Canadian tar sands producer.

Prime Minister Stephen Harper rubber-stamped the controversial deal despite strenuous objections from many, including some Conservatives who have reservations about China owning a big chunk of the oil patch.

Amnesty International Canada also raised concerns about CNOOC’s human rights record.

There were no such headlines or public controversy in 2011 when CNOOC quietly acquired 60 per cent of Calgary-based Northern Cross Yukon.

Established in 1994 by Richard Wyman and David Thompson, Northern Cross had 15 permits to explore 1.3 million acres of Yukon land. But the clock was ticking on its six-year permits, which the company had promised to spend about $20 million exploring.

Along came CNOOC with both the money and know-how to conduct the work now currently underway in the Eagle Plain and Peel basins.

Northern Cross did get some local press earlier this year when it wanted to use hydraulic fracturing. It later retracted the request after it came under fire from those opposed to fracking in the territory.

But the issue is bound to resurface.

Changes to the oil and gas act the government is now ramming through will pave the way for fracking regulations to be developed.

CNOOC is owned by the communist government of China. It’s the country’s third biggest oil company.

Following news that Ottawa had approved the CNOOC-Nexen deal, a coalition of groups concerned about human rights in China and Tibet issued a statement denouncing the deal.

“There have been credible allegations that CNOOC has been associated with human rights violations in Tibet and Myanmar (Burma) and also with respect to Falun Gong practitioners employed by the company,” said the coalition, which includes Amnesty International.

“The Chinese government itself continues to be responsible for widespread and systematic human rights violations through the country,” it said.

Related stories:

Nexen Cave-in: Chairman Harper’s Economic Desperation (thetyee.ca  Dec. 8)

Nexen takeover by CNOOC would have been hard sell under new rules (Canadian Press, Dec. 10)