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Total acquisitions by Chinese energy firms jumped from less than $2 billion between 2002 and 2003 to nearly $48 billion in 2009 and 2010, according to the International Energy Agency. Often, they are paying a premium to get those deals done. The CNOOC offer of $27.50 a share is 60 percent above Nexen's closing price last Friday. Given that Nexen's share price several years ago was $40, however, the deal is less expensive than it looks, said Gordan Kwan, head of energy research at Mirae Asset in Hong Kong. Despite its own slowing growth, China's demand for energy is soaring, partly fueled by a drive to buy at a time when prices are relatively weak. The country's imports of liquefied natural gas jumped 29 percent in the first half of this year while coal imports surged 61 percent, according to Chinese customs data. One key aim of the acquisition, analysts say, is to acquire advanced technology. "This deal with Nexen has deep-water technology, shale gas, oil sands as well as paving the way to develop in Nigeria," Kwan said. "CNOOC, 10 years from now when they look back at it, this will be a great deal," he said. Nexen operates in western Canada, the Gulf of Mexico, North Sea, Africa and the Middle East, with its biggest holdings in oil sands. But it is also exploring for natural gas in shale rock formations and owns about 300,000 acres (121,400 hectares) of shale-gas blocks in the Horn River Basin in British Columbia. The U.S. Energy Information Administration has estimated that China has about 36 trillion cubic meters (1,300 trillion cubic feet) of recoverable shale gas, the biggest known reserves. But the country lacks the expertise needed to get to it.
[Associated
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