(Reuters) – State oil company CNOOC plans to buy Canadian rival Nexen Inc for $15.1 billion, a deal which if successful would be China’s biggest foreign corporate takeover and a test of Ottawa’s tolerance of outside interest in its resources.
Offshore producer CNOOC said it would pay $27.50 cash per share, a 61 percent premium to Nexen’s closing price in New York on Friday.
The move is the most ambitious foray by resource-hungry China into North American energy since a 2005 attempt to buy U.S.-based Unocal for $18.5 billion was thwarted by a political backlash there.
CNOOC has only nine years worth of reserves based on its current production — one of the lowest ratios among major oil companies worldwide — and said the deal would increase its proven reserves by 30 percent.
“CNOOC has been seeking overseas acquisitions, as the domestic reserves are limited. But there has been many limits, things like foreign companies (being) reluctant to sell, price too high. This deal would be quite a success,” said Yan Shi, oil analyst at brokerage UOB Kay Hian in Shanghai.
The move was quickly followed by another Chinese move on Canadian oil assets, as Sinopec Corp said it would buy 49 percent of Talisman Energy’s UK unit for $1.5 billion.
CNOOC already has a number of co-operation deals with Nexen, which operates in many of the world’s most significant producing regions, including Western Canada, the UK’s North Sea, the Gulf of Mexico and offshore Nigeria.
Nexen, whose assets include conventional oil and gas, oil sands and shale gas and which recently underwent a management shakeup, has been seen for some time by investment bankers as a potential target.
A CNOOC statement said the Nexen board unanimously approved the deal.
CNOOC made its first tentative Canadian investment in 2005, paying C$122 million ($120.8 million) for a 16.7 percent share of the then-private oil sand developer MEG Energy Corp.
It completed a C$2.1 billion acquisition of Opti Canada Ltd in November, giving the Chinese company its second stake in a Canadian oil sands company.
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