• China unveils blockbuster foreign energy deal

    BEIJING, July 23, 2012 (AFP) – China’s state-owned energy colossus CNOOC unveiled a $15.1 billion bid to buy Canada’s Nexen Monday, in what would be the largest-ever foreign commercial purchase by the oil-hungry nation.

    Seven years after political panic about China’s thirst for global energy assets scuppered a massive bid to take over California’s Unocal, CNOOC announced it was trying for another blockbuster North American deal.

    The proposed CNOOC-Nexen takeover, which has yet to be approved by regulators, would be China’s largest foreign investment and its largest energy deal, according to data firm Dealogic.

    Calgary-based Nexen produces the equivalent of around 213,000 barrels of oil a day, with concessions in Canada’s oil sands, Britain’s North Sea, Nigeria, the Gulf of Mexico and Colombia.

    China is the biggest energy consumer in the world, the second-biggest consumer of oil and has been snapping up resource assets across the globe in order to fuel break-neck growth.

    While Nexen currently has debts of about $4.3 billion, the deal is likely to face scrutiny from regulators across a range of countries due to the Chinese government’s involvement.

    In Britain — where a large slice of Nexen’s production takes place — the Office of Fair Trading said it was too early to comment.

    In a joint statement the firms tried to head off likely concerns.

    They pledged to keep the regional headquarters in Calgary, Canada, and proposed Nexen take management of existing CNOOC operations in North America and the Caribbean.

    Nexen’s assets in Britain, the United States and other countries would continue to be managed from regional offices, and CNOOC would retain the current management, employees and local suppliers in those operations.

    “CNOOC is already attempting to allay the inevitable concerns about regulatory roadblocks to the deal,” said Barclays Capital analyst Harry Mateer.

    “The company’s plan… should be viewed favorably by Canadian politicians, in our view.”

    The deal won unanimous approval from the boards of both companies.

    “The acquisition reflects our strong belief in Nexen’s rich and diverse portfolio of assets and world-class management and employees,” CNOOC chairman Wang Yilin said in a statement.

    “We strongly believe that this acquisition will create long-term value for CNOOC Ltd’s shareholders.”

    Nexen chairman Barry Jackson said he believed the transaction would deliver “significant and immediate” value to the company’s shareholders.

    “The Nexen board is unanimous in its view that the transaction is in the best interest of Nexen and recommends shareholders vote in favor of the transaction,” he said.

    The deal offers Nexen shareholders US$27.50 per share in cash, a premium of 61 percent on Friday’s closing price.

    On Monday, in New York and Toronto, Nexen shares rose 52 percent.

    The deal is slated to close in the fourth quarter of this year.

    If completed, it would be the biggest but by no means the only CNOOC investment in North America.

    CNOOC already has 2.8 billion Canadian dollars invested in Canada, including stakes in MEG Energy Inc. and oil sands producer OPTI Canada Inc.

    The OPTI project is a joint venture with US energy giant ConocoPhillips.

    1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

    Loading ... Loading …

    Comments are closed

  • Make Music is quickly approaching once again and we are treated to another line up of great up and coming musical acts. The festivities take place this Saturday in Pasadena, June 7, from 11 a.m. to 11 p.m. and is geared for people of all ages. Those in...
    Happy New Year! Rose Parade Float Trophy Winners...
    Top Christian recording artist, Phil Wickham, will be performing live in Pasadena on Friday, August 22. Maranatha High School is delighted to welcome this talented artist to the stage of the famous Ambassador Auditorium. His song, “This is Amazing Grac...
    Fifteen years ago, a handful of curious citizens assembled in front of The Tribune and watched as then-Los Angeles County Sheriff Lee and still-San Marino resident Lee Baca started the city’s inaugural 5K walk and run....
    The Pasadena Guild of Children’s Hospital Los Angeles has pledged a $3 million endowment to fund the Pasadena Guild Chair in Developmental Biology and Regenerative Medicine at Children’s Hospital Los Angeles....
    Directory powered by Business Directory Plugin