CNOOC to buy Canada's Nexen for $15.1 billion

[July 23, 2012]  SHANGHAI (AP) -- Chinese offshore oil and gas giant CNOOC Ltd. said Monday it has agreed to buy Canadian producer Nexen Inc. for $15.1 billion in China's biggest-ever overseas energy acquisition.

CNOOC and other big state-owned Chinese energy companies have stepped up purchases of oil and gas assets in the Americas in the past several years as part of a wider strategy aimed at securing access to resources needed to fuel China's fast growing economy.

The offer of $27.50 a share is a premium of 60 percent to Nexen's closing price Friday on the New York Stock Exchange.

CNOOC said it expects the takeover to be finalized in the fourth quarter of this year, pending government approvals.

The companies had earlier set a strategic alliance that involved CNOOC investments in Nexen offshore wells in the Gulf of Mexico.

CNOOC said it planned to list its shares on the Toronto Stock Exchange as part of its longer term strategy.

Calgary, Alberta-based Nexen operates in Western Canada, as well as in the Gulf of Mexico, North Sea, Africa and the Middle East, with its biggest reserves in Canadian oil sands. It produced an average of 213,000 barrels of oil equivalent a day in the second quarter of this year.

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

The acquisition vastly expands CNOOC's holdings in Canada, where the company has already invested about $2.8 billion. CNOOC said it plans to set up its regional headquarters in Calgary, retaining Nexen's management team and staff while increasing the company's spending to develop the Canadian company's energy reserves.

"This transaction will allow for significant investment in our business and opens the door to new opportunities for our employees," Kevin Reinhart, interim CEO of Nexen, said in a statement.

[Associated Press; By ELAINE KURTENBACH]

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