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CNOOC seals Nexen acquisition

By Song Shengxia (Global Times)

08:55, February 27, 2013

China's largest offshore oil producer announced Tuesday it had completed its acquisition of Canadian oil and gas company Nexen Inc, making it the largest overseas takeover by a Chinese company and opening up opportunities for Chinese companies to complete more energy deals in developed countries.

China National Offshore Oil Corporation (CNOOC) acquired Nexen's common and preferred shares at a total of $15.1 billion, CNOOC announced in a statement published on its website Tuesday.

"The acquisition will give the company a leading international platform for development. We believe the acquisition is in line with the company's development strategy and will bring long-term benefits to our shareholders," Wang Yilin, chairman of CNOOC, said in the statement.

Kevin Reinhart will continue to serve as chief executive of Nexen, which will operate as a wholly-owned subsidiary of CNOOC, while Li Fanrong, CEO of CNOOC, will chair the new board of Nexen, the statement said.

The acquisition exceeded the total value of Chinese investment in Canada at the end of 2011, which stood at $10.7 billion, official data showed.

"The most significant impact of the deal is that China's companies have successfully cracked the market of developed countries by successfully completing the acquisition deal with Canada," Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, told the Global Times, noting that most of China's past energy acquisitions were made with underdeveloped countries or countries in turbulence.

"It opens up more opportunities for Chinese energy companies in developed countries. After being transformed into multinational companies through overseas acquisitions and mergers, Chinese companies could even set up gas stations overseas in the future," Lin said.

The deal was first announced by CNOOC in July 2012, and was approved by Canadian regulators in December.

On February 12, the last major hurdle was cleared after the Committee on Foreign Investment in the US gave its nod for the takeover.

The US had a say in the deal because Nexen, based in Calgary, Alberta, controls exploration and production assets in the Gulf of Mexico.

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