China'S Cnooc Oil Company Acquires Canada'S Nexen For $15Bn

[News_Editor]

China's CNOOC oil company acquires Canada's Nexen for $15bn < br />

2012-07-24 20:27:30 GMT+7 (ICT)

CALGARY, CANADA (BNO NEWS) -- China's largest producer of offshore crude oil and natural gas, China National Offshore Oil Corp. (CNOOC), has agreed to acquire Canadian oil and gas company Nexen, Inc. for roughly $15.1 billion in cash, the companies announced on Monday.

According to the agreement, CNOOC will purchase all of the outstanding common shares of Nexen for $27.50 per share in cash, which is 61 percent higher than Friday's closing share price on the New York Stock Exchange, and the deal includes the company's current debt of $4.3 billion which will remain outstanding.

"The acquisition reflects our strong belief in Nexen's rich and diverse portfolio of assets and world-class management and employees," said CNOOC Chairman Wang Yilin. "This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process. We strongly believe that this acquisition will create long-term value for CNOOC Limited's shareholders."

During the second quarter of this year, Nexen produced an average of 207,000 barrels of oil equivalent per day. As of December 2011, it also has about 5.6 billion barrels of oil equivalent when its Canadian oil sands are considered.

If approved, the deal will mark China's largest ever foreign business takeover, but analysts expect a long and possibly arduous regulatory process which could take more than nine months. The companies, however, said they expect to complete the transaction in the fourth quarter of 2012.

-- © BNO News All rights reserved 2012-07-24

[BookMan]

China securing all the oil for its future needs under the noses of America.

[geriatrickid]

China securing all the oil for its future needs under the noses of America.

Yes and no. Most of the company's assets were outside of Canada.

[BookMan]

China securing all the oil for its future needs under the noses of America.

Yes and no. Most of the company's assets were outside of Canada.

I wasn't aware of that. I thought this was directly related to the Oil shale/Oil sand deposits that Canada have and how they were talking about doing a deal with China, as Obama didn't want to lock in a deal or a high price or something similar. I thought at the time it was odd that America would not want to secure such a large oil supply right next to its borders.

[geriatrickid]

The Chinese already had a sizeable interest in the company's oil sands business;...

Nexen has an interest in more than 300,000 acres in the Athabasca region, with an estimated three to six billion barrels of contingent recoverable oil sands resource.

Long Lake: Nexen is a 65% owner and the operator of Long Lake, which began producing in 2008. CNOOC Canada Limited, a wholly-owned subsidiary of (CNOOC) is our partner, with a 35% interest.

Of more concern will be the foreign regulators' positions;

....the largest component of our conventional business occurring offshore, in the UK North Sea, Gulf of Mexico and the Atlantic Ocean, near West Africa. In 2012, approximately 70% of our production is expected to come from offshore facilities.

.........We produce shale gas in northeastern British Columbia, Canada and we’re exploring development opportunities in Poland and Colombia

- The tar sands business isn't going anywhere right now as the price of oil isn't hgh enough yet to encourage additional development.

- As shale gas environmental issues multiply (poisoned water, pollution etc.) there is as much resistance to shale gas exploration in Canada as there is to the tar sands.

Edited July 25, 2012 by geriatrickid