CNOOC Limited announced an agreement to buy Canadian producer Nexen Inc in a $15.1 billion deal.
CNOOC Limited is China’s largest producer of offshore crude oil and natural gas, and one of the largest independent oil and gas exploration and production companies in the world. CNOOC Limited primarily engages in exploration, development, production, and sales of oil and natural gas and has four major producing areas in offshore China as well as oil and gas assets in Asia, Africa, North America, South America, and Oceania.
Nexen is an independent, Canadian-based global energy company that is focused on growth strategies—oil sands and shale gas in Western Canada and conventional exploration and development primarily in the North Sea, offshore West Africa, and deepwater Gulf of Mexico.
The acquisition of Nexen will expand CNOOC Limited’s overseas businesses and resource base. Nexen will complement CNOOC Limited’s offshore production footprint in China and extends CNOOC Limited’s global presence in Western Canada, the U.K. North Sea, the Gulf of Mexico, and offshore Nigeria. Nexen management’s current mandate will be expanded to include all of CNOOC Limited’s North American and Caribbean assets.
CNOOC has announced that it hopes to provide significant benefits to Canada through the transaction. CNOOC’s plans for the acquisition include:
- Establish Calgary as CNOOC Limited’s North and Central American headquarters, which will manage Nexen’s global operations and CNOOC Limited’s existing operations in the region
- An intention to retain Nexen’s current management team and employees
- To enhance capital expenditures on Nexen’s assets
- An intention to list CNOOC Limited shares on the TSX
- To enhance community and social commitments
Wang Yilin, chairman of CNOOC Limited said, “The acquisition reflects our strong belief in Nexen’s rich and diverse portfolio of assets and world-class management and employees. This is an exciting opportunity for us to build on our existing joint venture relationship with Nexen in Canada, and to acquire a leading international platform in the process. We strongly believe that this acquisition will create long-term value for CNOOC Limited’s shareholders.”
Commenting on the acquisition, Barry Jackson, chairman of the Board of Nexen, said, “This transaction delivers significant and immediate value to Nexen shareholders. The Nexen Board is unanimous in its view that the transaction is in the best interest of Nexen and recommends shareholders vote in favor of the transaction.”