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Nexen deal no coup for consumers

(Global Times)

08:23, February 28, 2013

China National Offshore Oil Corporation (CNOOC), China's largest offshore oil and gas producer, announced Tuesday that it has finished its $15.1 billion purchase of Canada's Nexen Inc. This overseas acquisition, China's largest to date, is expected to help the country have more of a say in international crude pricing since Nexen owns petroleum resources which are closely tied to the crude benchmark Brent, according to local media reports.

What will all of this mean for Chinese consumers though? Probably not much.

CNOOC is one of the big three oil companies which dominate China's oil market. After the company's takeover of Nexen, CNOOC will become not only a middleman but a supplier for the Chinese oil market, meaning that if international crude prices drag down oil prices here in China, it will suffer a loss. In that case, CNOOC could be motivated to inflate international prices in order to protect its profits in China.

The author is Fan Dayu, a media personality.

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