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Chinese oil giant CNOOC buys Canada's Nexen

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(Globalpost/GlobalPost)

The Chinese oil giant CNOOC completed its $15.1 billion purchase of Canada's Nexen energy group on Monday, in what analysts have said is China's largest foreign investment.

Canada gave the green light in December, as did the United States, which had to approve the deal because of Nexen's activities in the Gulf of Mexico.

Nexen confirmed the completion of the acquisition in a statement, noting that its shareholders had received $27.50 per share, a gain of $10 compared to the day before the announcement of the transaction in July.

In a separate statement, the head of state-run CNOOC Wang Yilin said "we strongly believe that this acquisition is a good strategic fit for us and will create long-term value for our shareholders."

The CNOOC deal is China's largest foreign investment and its largest energy deal, according to data firm Dealogic.

Calgary-based Nexen produces the equivalent of around 213,000 barrels of oil a day, with concessions in Canada's oil sands, Britain's North Sea, Nigeria, the Gulf of Mexico and Colombia.

Up until the purchase, Nexen was the 10th largest Canadian petroleum company by sales, with particularly promising assets in the oil sands of the western province of Alberta.

Nexen said it would be retired from the Toronto Stock Exchange in the coming days, with CEO Kevin Reinhart staying on as head of the CNOOC subsidiary.

The deal sparked debate in Canada, where Prime Minister Stephen Harper approved the transaction while tightening the criteria for the purchase of Canadian companies by foreign firms, particularly in the oil sands sector.

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http://www.globalpost.com/dispatch/news/afp/130225/chinese-oil-giant-cnooc-buys-canadas-nexen