How long way to go for CNOOC after Nexen takeover approval?

By Wang Xiuqiong & An Pei

As Chinese oil conglomerate China National Offshore Oil Corporation (CNOOC) Ltd. prepares to move ahead with the country’s biggest ever overseas acquisition, it faces as many challenges as gains.

The Canadian government on December 7 approved CNOOC’s 15.1 billion-U.S. dollar bid to buy Calgary-based oil and gas producer Nexen Inc., paving the way for a final completion of the long-debated deal.

The takeover will support CNOOC’s international drive and diversify its business but also contains political and financial risks, experts said.

The deal is “of strategic importance” to CNOOC’s international expansion, said Wang Zhen, an energy expert at the Academy of Chinese Energy Strategy.

CNOOC has said acquiring Nexen’s assets will strengthen its presence in Canada, Nigeria and the Gulf of Mexico and allow it to enter the oil- and gas-rich North Sea regions.

Lin Boqiang, a researcher at the Xiamen-based China Center for Energy Economic Research, said the purchase will make up for CNOOC’s weakness in onshore explorations and enhance its oil sands and shale gas operations.

As China’s largest offshore oil producer, CNOOC operates mainly in seas off China but has assets in Asia, Africa, North America, South America and Oceania, according to company information.

Nexen runs oil sands and shale gas projects in western Canada and conducts conventional explorations primarily in the British North Sea, offshore West Africa and the Gulf of Mexico.

The acquisition of Nexen needs further approvals by other governments involved, including the United States, but even a U.S. rejection, which looks unlikely to happen, will not affect the completion of the overall deal, Wang said.

CNOOC failed to win U.S. lawmakers’ support for its 18.5 billion-U.S. dollar bid to buy U.S. oil producer Unocal over national security concerns in 2005.

The state oil giant’s move in Canada this time also triggered debates on whether Canadian oil and gas reserves should fall under foreign state control.

Investors and business people supported the deal, which they said will benefit Canada’s oil and gas industry by giving it the much-needed capital.

The acquisition proposal was approved by a majority of Nexen shareholders in September, nearly two months after it was brought forward by CNOOC.

However, even after the purchase, CNOOC may still encounter political troubles in Europe for Nexen’s assets there, said Shen Yan, general manager of merger and acquisition at CCID Consulting Co., Ltd..

Moreover, CNOOC has somewhat overbid for the deal and has to take over 4.3 billion U.S. dollars of debts from Nexen, making profitability a key aspect to improve after the transaction, Shen said.

The Canadian company saw net income decrease to 59 million U.S. dollars in the third quarter of this year, 85 percent down from the previous quarter, with lower production and higher operating costs, according to its quarterly results.

Future oil price fluctuations may also impact CNOOC’s profits. Wang said financially-troubled energy firms being acquired and getting capital will in the long term benefit global energy supply and reduce oil prices.

For China’s state oil companies, it remains politically risky to “go global” as their state ownership often raise concerns over national security, said Wang.

Right after the approval, Canadian Prime Minister Stephen Harper told a press conference that the CNOOC-Nexen deal should be viewed as “the end” rather than the “beginning of a trend.”

He said his government has “determined that foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada.”

Shen advised encouraging more private firms to engage in overseas acquisitions, especially those of resources firms, to avoid the hassles.

China’s leading oil and gas developers spent nearly 20 billion U.S. dollars in 2011 on the purchase of overseas assets, compared with 150 billion U.S. dollars spent worldwide in this sector, according to a report by the Economic and Technology Research Institute of the China National Petroleum Corp. in February.



  1. Stacie wrote:

    I’ve had a lot of hassle researching information about business plan outline template free,
    glad I found your site though…very informative
    Bookmarked your site, I have to keep up to date with regular posts

  2. Howdy! I know this is somewhat off topic but I was wondering if you knew where I could get a captcha plugin for my comment form?I’m using the same blog platform as yours and I’m having trouble finding one? Thanks a lot!my web-site … let me watch this

  3. Tara Hinds wrote:

    Hey very cool web site!! Guy .. Excellent ..Superb .. I will bookmark your blog and take the feeds also? I am glad to seek out numerous helpful info here within the post,we’d like work out extra techniques on this regard, thanks for sharing.. . . . .Feel free to visit my site :: cr1/3n battery

  4. Felisha Nobbs wrote:

    Currently the soften goes to the metering component, where the screw height remains consistent.Distinctive single screw extruder have unique functioning characteristics, and comprehensive comprehension of their running properties can provide whole engage in to the functionality of your machine. These heaters are good at absorbing as well as dispersing heat weblog :: double screw extruder

  5. Frieda wrote:

    Hello I am so glad I found your site, I really found you by accident, while I was browsing on Askjeeve for something else, Nonetheless I am here now and would just
    like to say thank you for a tremendous post and
    a all round thrilling blog (I also love the theme/design), I don’t have time to browse it all at the
    moment but I have bookmarked it and also included your RSS feeds, so when I have time I will
    be back to read a great deal more, Please do keep up the great b.

  6. Hi there! I just would like to give you a huge thumbs up for your great information you’ve got right here on this post.I will be coming back to your web site for more soon.Feel free to surf to my blog post global business advisors

  7. Dolly Holley wrote:

    Borrow cash byy а private financial institution loanᎪll private oans arre made սsing WebBank, a Utah-chartered Bank, limb FDIC. Alll Prosper personal loans arе unsecured, fully amortized personal loans.Loking as ɑ mortgage facing merge receipt?start a cramped enterprise? rework yοur mess?but find yyou famine ɑffecting belongings noг Ԁifferent collateral ѕο а few banks might ߋrder tο thаt mortgages?excellent news: еνery Prosper’ѕ mortgages aге unsecdured no collateral orderd. Υou enable tо а mortgage ⲣrimarily based ߋn yοur credit history.А more personal loanLoans approved іn minsideutes, gain started choose loan sort & quantity ߋn the form tο tһе ɑppropriateChase personal loan application κindӀnterest rateson retreat bank personal loans aгe utilized in splan оther աays.yοu’ll bе able to both select сoncerning retreat bank defended private loan rate noor а hhunt bank unprotected private loan raate relevant. ѕhould ʏοu optt fοr asecured private loan , yߋu աill have tо кeep ѕome service equivalent tо automobile neіther house аs ɑ collateral factor against tɦе lloan іn orrder tߋ secure thе ѕame. since,іf ʏоu ɦappen tߋ opt forundefended personal loans , emotionaln үօu needn’t hold аll blessing as collateral distinction. tһе ցeneral public select sudden unprotected ppersonal loan. but, impresssive unprotected personal loans ɑrе charged ɑt ցreater іnterest rates.nonetheless, іf уߋu halpen tо ρresent а very ɡood crerdit historical past prior tо noա,sudden bank would ρossibly offer үοu а discounted rate relevant before уоu regard fⲟr tɦе ѕame.Simple аlso secure online LoansⲞνеr limited a millionAmdricans empoweredDiscover private Loans munch helped ore tҺan total а million Americans.surrounded bу ɑll 5zero states.against diverse walks οf development.fоr tҺаt reasonn likelihood іѕ admirable, ѡᥱ may һelp үⲟu separate уоur goals, too.impreasive individuals ƅelow areexamples гegarding real Discover prospectts ԝhich’νе ƅᥱеn approved ρro а private loan. Loan аmount$ Loan fruitfulness credit QualityLoan amount$ Loan fruitfulness crerit QualityLoan quantity$ Loan ᥙѕe credit scorre QualityLoan amount$ Loan constructiveness credit QualityLoan quantity$ Loan constructiveness credit score QualityLoan quantity$ Loan productivity credit Quality Loan quantityLoan credit Qualitya personal loan ɑgainst Discover donate ԝill leet yoou understand ʏоur monetary objectives аnd goals.3 Kosta K,Chicago, ILimpressive folks ѡе labored wwere highly helpful moreover ԝе ferlt effectivey wnt іnside сoncerning strikingir means tօ verify еverything ᴡаѕ admirable.three Steven L,prot headdress, TXEliving Ι called in tɦᥱ customer service rep ԝaѕ νery ѡell mannered incouding ԁіԀ not deal աith you like іt waѕ assertively enterprise.3 Vanida M,Irvsurrounded bygton, NJ 3.Testimonials acquired from terviews carried оut surrounded by 2012 viaa actual Discover private Loans customersᏚtop bʏ mʏ web page – LocalCashNow

  8. Darby Trout wrote:

    If you’d like to be stored updated with all the goings on at the Tub Company included the newest deals and supply just fill out the shape below and we’ll do the rest.Here is my homepage jacuzzi filter

  9. It’s enormous that you are getting ideas from this paragraph as well as from our argument made blog: letmewatchthis in hd

  10. Hey just wanted to give you a quick heads up. The words in your content seem to be running off the screen in Chrome.I’m not sure if this is a formatting issue or something to do with internet browser compatibility but I figured I’d post to let you know.The layout look great though! Hope you get the problem solved soon. KudosCheck out my weblog :: let me watch this in hd

  11. Coy Amador wrote:

    The spare and repairs market requires effort in maintaining your relationship with your clients,but understanding them and figuring out what would swimsuit them will reap rewards in terms of repeat enterprise and new enterprise from sturdy suggestions.Also visit my web page jacuzzi whirlpool parts

  12. Fanny Hamblin wrote:

    Really no matter if someone doesn’t be aware of afterward its up to other users that they will help, so here it happens.Have a look at my website: nba 2K16 for xbox 360

  13. An impressive share! I have just forwarded this onto a co-worker whoo was conducting a little research on this.And he actually ordered me dinner due to the fact that I discovered it for him… lol. So let me reword this….Thank YOU for the meal!! But yeah, thanx for spending some time to discuss this issue here on your blog.Stop by my page :: Girls kennenlernen in Aargau Schweiz

  14. Fiona Ling wrote:

    Fеel frеe tօ suгf tօо mmу ᴡᥱbѕіtе :: Gay Chat Pal

Leave a Reply