CNOOC Engages with Canadian Stakeholders

<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - Emerging Chinese Global Competitors Award, European Foundation for Management Development (EFMD) Case Writing Competition</strong></p><br>In 2012, the Chinese state-owned oil corporation China National Offshore Oil Corporation (CNOOC) acquired Nexen, a Canadian oil exploration company, in what was the largest-ever acquisition abroad by a Chinese company. The Chinese economy had become increasingly dependent on imported energy and the aim of this acquisition was to secure access to natural resources around the world. The deal received intense media attention and its merits for Canada were widely discussed in the media. Eventually, it was approved by the Canadian government after CNOOC made substantial commitments regarding Nexen’s future operations. However, after the acquisition, Nexen experienced considerable challenges regarding its financial performance and its health, safety, and environment processes. Financial performance was undermined by a sharp drop in the price of oil from 2014 onward. Moreover, Nexen’s operations were disrupted by a pipeline leak, a closure of pipelines by the regulator, and a plant explosion. Each event challenged the Chinese and Canadian leadership of Nexen to face the media and minimize reputational damage and safeguard its health and safety record. How could the company cut its losses and downscale its engagement in Canada? Did it need to refocus its Canadian operations to use its assets in a different way?

This case provides a basis for discussing how a foreign-owned company ought to engage with the media and other stakeholders in Canada. This case has been designed for use in class in combination with publicly available videos. The case is intended for advanced international business and business and society classes. In an international business class, the key concepts include subsidiary strategy, multinational enterprise–government relationships, host-country legitimacy, stakeholders of multinational <br>enterprises, non-market strategies, and institutional environment for mergers and <br>acquisitions. In a business and society class, the key concepts include multinational enterprises, stakeholder engagement, media engagement, and health, safety, and environment standards.<br><br> <br>After completion of this case, students will be able to<ul><li> <br>appreciate the complexity and importance of stakeholder needs in host societies;</li><li> <br>appreciate the specific challenges faced by Chinese multinationals operating in <br>Western societies;</li><li> <br>evaluate and develop strategies for stakeholder engagement (political influence <br>strategies, non-market strategies); and</li><li>evaluate and develop strategies to respond to corporate crises.</ul></li>

• Chinese multinationals, stakeholders, mergers and acquisitions, public relations, environmental standards, crisis management, media relations