Security fears dogged Canada debate on China energy bid

Updated 27 December 2012
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Security fears dogged Canada debate on China energy bid

OTTAWA: In September, two months after China’s state-owned CNOOC Ltd. made an unexpected $ 15.1 billion bid for Canadian energy company Nexen Inc, Canada’s spy agency told ministers that takeovers by Chinese companies may threaten national security.
The rare warning from the Canadian Security Intelligence Service (CSIS), which was disclosed to Reuters by intelligence sources, did not stop the takeover. That was approved by Canadian authorities recently.
But the intervention and an influential US lawmaker’s warning in October that Canadian companies should be careful about doing business with Chinese telecom equipment companies Huawei Technologies Co. and ZTE Corp. made the approval process for the deal more difficult than initially expected.
“CSIS did not like the Nexen bid and thought it was a bad idea for Chinese firms to be investing in the oil sands. It all played into their greater fears about firms like Huawei,” said one person familiar with the agency’s concerns. “They do not want to wake up one day and realize a crucial sector of the economy is under the control of foreign interests.”
And after listening to the spy service, which usually keeps a low profile, Canada drew up surprisingly tough foreign investment rules that were unveiled when approving the Nexen deal, China’s biggest-ever successful foreign takeover. In a clampdown on companies it deems influenced by foreign governments, Canada will block similar purchases in the future.
CSIS has been silent about what it said to Ottawa on the Nexen transaction, and it declined to comment for this story. It didn’t specifically recommend the CNOOC deal be blocked, but rather warned more generally about such deals with Chinese entities, the person said.
In reality, the government was unlikely to want to block the CNOOC bid, given a high-profile push by Prime Minister Stephen Harper earlier in the year to boost ties with China, and given that a lot of Nexen’s assets are outside Canada, and it has underperformed other energy companies.
By pushing back aggressively, CSIS ensured that it got foreign investment policy tightened significantly to deter similar such takeovers by companies under the sway of foreign governments.
“I think people at CSIS and elsewhere are going ‘Good. That was a very good response by the government’,” said Ray Boisvert, a former CSIS assistant director of intelligence, who retired this year after almost three decades at the agency.
“It did reflect some of those deep strategic concerns that practitioners have had about this kind of investment.”
Specific worries include theft of Canadian intellectual property, espionage, computer hacking and foreign companies gaining too much influence over crucial sectors of the economy, said the person familiar with the agency’s views.
The government could, in theory, nationalize assets if it thought foreign control was problematic. But the pro-business Conservatives would likely find it politically unpalatable to take such a step.
“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead,” Harper said as he announced the new investment rules.
In October, the US House of Representatives’ Intelligence Committee urged US firms to stop doing business with Huawei and another Chinese telecom equipment company ZTE on the grounds that Beijing could use products made by the two companies to spy.
The House Intelligence Committee’s chairman, Rep. Mike Rogers, a Michigan Republican, urged Canada to take a similar stance, and two days later, the Canadian government indicated it would not let Huawei help build a secure government communications network because of possible security risks.
“The Huawei business caused a lot of political complications for the CNOOC bid,” another person familiar with the CNOOC deal said of the US committee’s report.
Both Huawei and ZTE have repeatedly denied the allegations in the report, and China’s foreign ministry dismissed as “baseless” the idea that security concerns could impede commercial ties.
“We hope that the relevant party can objectively and justly treat Chinese companies’ overseas investment and cooperation plans, and stop actions which harm Chinese companies’ image and do more to benefit the promotion of bilateral trade and business cooperation,” said ministry spokeswoman Hua Chunying.
In its annual report, released in September, CSIS noted risks that included espionage and illegal technology transfers, and said some foreign state-owned enterprises had “pursued opaque agendas or received clandestine intelligence support for their pursuits” in Canada.
The agency did not give details, but added: “When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests.”
CSIS, hit by controversy in 2010 after its head suggested China had too much influence over some Canadian provincial politicians, did not mention any country or firm in its report.
It is unclear how much, if any, influence the US had on the Canadian authorities’ foreign investment policy.
Fen Hampson, head of the global security program at the Center for International Governance Innovation in Waterloo, Ontario, said he had learned that a US official visited Ottawa in the last few months to discuss mutual concerns about foreign state-owned enterprises.
US Ambassador David Jacobson said he was not aware of such a meeting, but he said officials from the two countries met constantly.
“I would be surprised if almost any issue you could think of has not come up in one or more of those conversations,” he said.
“The US has not sought to influence Canada’s decision with respect to that (CNOOC’s bid)... We respect that decision.”
The Canadian government did not respond to a request for a comment.
Chinese companies have bought up smaller Canadian energy firms before, but the July 23 bid for Nexen was their first attempt to buy one of the larger players.
Nexen has assets in Canada, the North Sea, Nigeria and the Gulf of Mexico. Technology that Nexen and its partners use for deep sea drilling could interest CNOOC.
Asked about the CSIS concerns, a spokeswoman for Industry Minister Christian Paradis replied: “The government has the authority to take any measures it considers necessary to protect national security.”
Yet two people close to the deal noted that the Canadian government did not exercise its option to do a separate review of the potential security risks of the CNOOC-Nexen bid, again signaling its concerns were tied to overall Chinese investment rather than to this particular deal.
Under the new rules, which Paradis is responsible for enforcing, foreign state-owned enterprises can no longer buy controlling stakes in assets in the oil sands, the biggest reserve of crude oil outside Saudi Arabia and Venezuela.
Such enterprises can buy minority stakes in the oil sands, or majority stakes in companies outside the oil sands. Companies deemed to have strong government links will be treated with particular caution wherever they propose to invest.
“When it comes to our security and intelligence services, they would rather pull up the drawbridge than let it down,” said Hampson, co-author of a report on trade ties between Canada and emerging nations that he discussed with Harper in June.


Saudi financial ecosystem hits $267bn milestone in 2024 in line with Vision 2030

Updated 13 July 2025
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Saudi financial ecosystem hits $267bn milestone in 2024 in line with Vision 2030

  • FSDP annual report highlights booming fintech, capital market growth, and strengthened investor confidence
  • Foreign investor holdings surge 501 percent since 2017, while financial literacy and inclusion gain ground

RIYADH: Saudi Arabia’s financial sector recorded exceptional growth in 2024, with fintech firms reaching 261, venture capital investment in the sector exceeding SR7.6 billion ($2.03 billion), and gross written premiums in insurance climbing to SR76.1 billion.

Locally managed assets in the capital market surged to SR1 trillion ($267 billion), while foreign ownership rose to over SR420 billion. These milestones, outlined in the Financial Sector Development Program’s 2024 annual report, reflect the Kingdom’s accelerating progress toward the economic diversification goals of Vision 2030.

Saudi Finance Minister Mohammed Al-Jadaan, also chairman of the Financial Sector Development Program Committee, emphasized that the program continues to deliver on its promise of sustainable success.

He said the FSDP is building an economic future that solidifies Saudi Arabia’s regional and international standing while reflecting the rapid development across all sectors in this prosperous era.

The FSDP has implemented a wide range of reforms and initiatives to build a robust, diversified, and inclusive financial system. The program has helped to strengthen the Kingdom’s regional and global economic standing while enabling innovation, job creation, and investment growth.

Fintech emerged as a key success story in 2024, with the number of operating companies surpassing initial targets and contributing to the creation of over 11,000 direct jobs. The Saudi Central Bank licensed D360 Bank to begin operations, and electronic payments accounted for 79 percent of total retail transactions — underscoring the shift toward a cashless economy. The year also saw the launch of FinTech2024, the Kingdom’s first international fintech conference.

Capital markets continued their upward trajectory. With 44 new listings, the number of publicly traded companies reached 353. Locally managed assets grew 169 percent compared to 2017, reaching SR1 trillion, while foreign investor holdings jumped by 501 percent over the same period to SR 420 billion.

Notable developments included the introduction of the TASI 50 index, single-stock options, Real Estate Investment Certificates, and the listing of Saudi ETFs in Tokyo, Shanghai, and Shenzhen. The Capital Market Authority also launched the Kingdom’s Green Finance Framework to encourage sustainable investment.

In the debt capital market, the CMA unveiled a strategic roadmap and issued the first license for an alternative trading system. The Kingdom successfully conducted its first international dollar bond issuance under the Government’s Global Bond Program, attracting approximately $30 billion in orders.

Meanwhile, the government introduced “Sah,” a savings product aimed at fostering a culture of personal saving. Credit rating agencies Moody’s, Fitch, and S&P issued upward revisions to Saudi Arabia’s sovereign credit ratings in response to the country’s fiscal discipline and financial reforms.

The insurance sector also posted strong performance. Gross written premiums rose 16.3 percent from 2023 to reach SR 76.1 billion, while net profits increased by 12.5 percent to SR 3.6 billion. The Insurance Authority mandated the Saudization of all insurance product sales roles and launched a Regulatory Sandbox to support startup innovation. The number of licensed InsurTech firms rose by 56 percent. New digital services included automated motor insurance, simplified claims processes, and TELEMATICS—a unified platform for tracking driver behavior.

The finance minister noted that the progress reflected in the report underscores the Kingdom’s broader development efforts under the leadership of King Salman and Crown Prince Mohammed bin Salman.

Support for small and medium enterprises remained a cornerstone of financial sector development. Saudi startups attracted SR 2.8 billion ($750 million) in venture capital, maintaining the Kingdom’s lead in the MENA region. The share of bank credit to SMEs increased from 8.4 percent in late 2023 to 9.4 percent by the end of 2024.

The SME Bank disbursed over SR1.5 billion in financing to 1,029 enterprises, while the Kafalah program facilitated SR 107.2 billion in financing guarantees—advancing the Vision 2030 target for SMEs to contribute 35 percent of GDP.

On the regulatory front, the FSDP advanced significant legislative reforms to enhance transparency, competitiveness, and investor protection. Updates included new principles for finance and real estate refinance companies, revisions to debt crowdfunding rules, and regulatory changes to real estate financing. The CMA also approved omnibus accounts and relaxed conditions for debt offerings, further liberalizing capital markets.

Financial literacy and capability development remained a key focus. The Financial Academy trained more than 59,000 participants through its programs since inception. The third edition of the Gulf Smart Investor Award continued to raise awareness of personal finance, while the “Malee” program began measuring and promoting financial literacy among children aged 8 to 12.

Looking ahead, the Financial Sector Development Program aims to build on this momentum in 2025 by aligning with global standards, expanding financing options, increasing financial inclusion, and deepening capital market participation. As outlined in its annual report, the FSDP remains committed to fostering innovation, enhancing regulatory efficiency, and driving sustainable growth to realize the full ambitions of Saudi Vision 2030.


Saudi Arabia issues over 1,300 new industrial licenses in 2024: Ministry report

Updated 13 July 2025
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Saudi Arabia issues over 1,300 new industrial licenses in 2024: Ministry report

  • Private sector investments in industrial cities and zones totaled SR1.9 trillion
  • Ministry developed 454 investment opportunities worth SR143 billion

RIYADH: Saudi Arabia has issued 1,346 new industrial licenses in 2024, attracting over SR50 billion ($13.3 billion) in new investments, a recent report revealed.

Private sector investments in industrial cities and zones totaled SR1.9 trillion, and the number of licensed workers in the field was 1.09 million, with a 36 percent Saudization rate, the analysis by the Kingdom’s Ministry of Industry and Mineral Resources said.

The new figures are consistent with the nation’s efforts to transform its industrial sector to boost the number of factories to 36,000 by 2035, of which 4,000 will be fully automated. The goal is part of the Kingdom’s strategy to foster a dynamic, innovation-driven industrial sector.

They also align with data from January, when the country’s industrial production index rose by 1.3 percent year-on-year, driven by ongoing growth in manufacturing and waste management, according to the General Authority for Statistics. Monthly, the index remained stable at 103.9, unchanged from December.

“We have all the capabilities to achieve a competitive and sustainable industrial economy, including ambitious young talent, a distinguished geographical location, rich natural resources, and leading national industrial companies,” the report said, citing Crown Prince Mohammed bin Salman. 

“Through the National Industrial Strategy and in partnership with the private sector, the Kingdom will become a leading industrial power, contributing to securing global supply chains and exporting high-tech products to the world,” he added.

The ministry has also developed 454 investment opportunities worth SR143 billion, which are linked to the industrial sectors targeted in the National Industrial Strategy.

The report shed light on how Saudi Arabia has achieved a global ranking of 33 in the Competitive Industrial Production Index.

“This progress reflects the Kingdom’s significant efforts to strengthen its industrial sector as part of Saudi Vision 2030, which aims to diversify the economy and reduce dependence on oil. This achievement also represents an advance of two places from the target, which is 35th place globally,” the Minister of Industry and Mineral Resources, Bandar Alkhorayef, said.

“These visions and objectives set forth major ambitions to align with the Kingdom’s position as an influential regional power within the G20 group and achieve Saudi Arabia 2030, which envisions the Kingdom as a leading industrial nation in which the mining sector is the third pillar of the national economy,” Alkhorayef added.

In June, Saudi Arabia launched the second phase of its standardized industrial incentives program to enhance competitiveness and strengthen the Kingdom’s trade balance.

Speaking at the Saudi Industry Forum in Dhahran at the time, Khalil Ibn Salamah, deputy minister of industry and mineral resources for industrial affairs, said the initiative supports the government’s efforts to drive high-value investments in priority sectors.

This comes as the nation works to position itself as a regional and global industrial hub. Since its initial launch, the program has drawn more than 1,000. Of the 118 applications received, 12 have reached the final qualification stage.


ACWA Power-led consortium signs $8.3bn deals for massive renewable energy push

Updated 13 July 2025
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ACWA Power-led consortium signs $8.3bn deals for massive renewable energy push

  • Five of the new projects are photovoltaic solar initiatives
  • Deals mark largest single-phase capacity signed globally for renewable energy projects

RIYADH: A Saudi consortium led by ACWA Power has signed agreements worth SR31 billion ($8.3 billion) to develop seven major solar and wind energy projects with a combined capacity of 15,000 megawatts, the Saudi Press Agency reported on Sunday.

The consortium includes the Water and Electricity Holding Co., a subsidiary of the Public Investment Fund, and Aramco Power, which is owned by Saudi Aramco. The deals were signed in the presence of Energy Minister Prince Abdulaziz bin Salman and fall under the National Renewable Energy Program, overseen by the Ministry of Energy.

Five of the new projects are photovoltaic solar initiatives, including the Bisha Project in the Asir region and the Humaij Project in Madinah, each with a capacity of 3,000 MW. The Khulis Project in Makkah will generate 2,000 MW, while the Afif 1 and Afif 2 projects, both located in the Riyadh region, will add another 4,000 MW combined.

In addition, two wind energy projects will be developed in Riyadh: the 2,000 MW Starah Project and the 1,000 MW Shaqra Project.

The agreements mark the largest single-phase capacity signed globally for renewable energy projects.

They underscore the Kingdom’s ongoing commitment to expanding its renewable energy infrastructure and its ability to deliver electricity at globally competitive costs.

This achievement reflects strong investor confidence and the success of Saudi Arabia’s financing and development strategies in the energy sector.


Most Gulf stocks subdued as Trump steps up tariff threats

Updated 13 July 2025
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Most Gulf stocks subdued as Trump steps up tariff threats

  • Saudi Arabia’s benchmark index fell 0.2%
  • Qatar’s benchmark index finished flat in a calm session

DUBAI: Gulf equities ended mixed on Sunday, with stocks drifting in a tight range during a quiet trading session as investors sought clarity after US President Donald Trump escalated his global trade war. 

Trump threatened on Saturday to impose a 30 percent tariff on imports from Mexico and the European Union, following the announcement of a 35 percent duty on Canadian imports, both starting Aug. 1. 

He also proposed a blanket tariff rate of 15 percent-20 percent on other countries, an increase from the current 10 percent baseline rate. 

Saudi Arabia’s benchmark index fell 0.2 percent, as mixed sector performance kept the market subdued ahead of key earnings. 

Utilities heavyweight ACWA Power declined 2.4 percent as its rights issue offering ended. 

Qatar’s benchmark index finished flat in a calm session, with telecom giant Vodafone Qatar gaining 1.2 percent. 

Investors remained cautious as the US Federal Reserve is widely expected to keep interest rates unchanged as it waits to see the impact of tariffs on price pressures. 

With Gulf currencies pegged to the US dollar, the Fed’s decisions on interest rates impact the region’s monetary policy. 

Outside the Gulf, Egypt’s blue-chip index dropped 0.8 percent, hit by a 1 percent fall in Commercial International Bank. 

Egypt’s central bank kept key interest rates unchanged on Thursday, pausing a trend of rate reductions despite inflation rates easing. 


Syria signs $800m agreement with DP World to bolster ports infrastructure

Updated 13 July 2025
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Syria signs $800m agreement with DP World to bolster ports infrastructure

  • Deal focuses on developing multi-purpose terminal at Tartus
  • DP world CEO pledged to make Tartus ‘one of the best ports in the world’

DAMASCUS: Syria signed a $800 million deal with UAE-based company DP World on Sunday to develop the port of Tartus, state media reported, as the new authorities continue their efforts to support post-war reconstruction.

“In the presence of President Ahmed Al-Sharaa, an agreement was signed between the General Authority for Land and Sea Ports and DP World, valued at $800 million, as a strategic step aimed at enhancing port infrastructure and logistics services in Syria,” state-run news agency SANA said.

The agreement follows on from a memorandum of understanding signed between the two sides in May.

Following the signing of the deal, DP World CEO Sultan Bin Sulayem said Syria’s economy had “significant assets, including the Port of Tartus, which represents an opportunity to transport and export many Syrian industries.”

In a statement also shared by state media, he pledged to make Tartus “one of the best ports in the world.”

DP World operates dozens of marine and inland ports and terminals globally, particularly in Asia, Africa and Europe

The Syrian civil war devastated the country’s infrastructure, and the new authorities hope to use the lifting of Western sanctions to attract investments and fuel reconstruction efforts.

Qutaiba Badawi, head of the General Authority for Land and Sea Ports, said the parties were “not merely signing a technical agreement, but we are laying the foundation for a new phase of field and maritime work in Syria, repositioning ourselves on the regional and international economic map.”

In May, Damascus signed a 30-year contract with French shipping giant CMA CGM to develop and run the port of Latakia.

That same month, Syria signed a $7 billion energy deal with a consortium of Qatari, Turkish and US companies as part of efforts to revive its crippled power sector.