Canada Close To Going With China due to Our denial Of Keyston Oil Pipe Line

July 30, 2012 in Debt Crisis, Economy, Energy

China’s CNOOC Ltd. (0883.HK) said Monday it has reached an agreement to acquire Canadian oil and gas producer Nexen Inc. (NXY) for $15.1 billion in cash.
 
In China’s biggest overseas energy acquisition to-date, CNOOC will pay $27.50 per share for Nexen, representing a 61% premium to their closing price on Friday on the New York Stock Exchange.
 
State-owned CNOOC is China’s largest offshore oil company. The deal will give it ownership of oil and gas reserves in western Canada, the U.K. North Sea, the Gulf of Mexico and offshore Nigeria.
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In 2012, approximately 70% of Nexen’s output is expected to come from offshore fields, according to Nexen’s website, making it a good fit for the Chinese company’s offshore fields. In 2011, Nexen produced around 207,000 barrels a day of oil equivalent.
 
Nexen, which describes itself as a major player in Canada’s oilsands sector, is also a producer of shale gas, in northeastern British Columbia.
 
In a statement on the Hong Kong stock exchange, CNOOC said it will fund the deal through existing cash resources and external financing. Nexen’s current debt of around $4.3 billion will remain outstanding, CNOOC said.
 
If the deal is approved by Nexen shareholders, Nexen will become a wholly owned subsidiary of CNOOC, the statement said.
 
Write to Aaron Back at aaron.back@dowjones.com
 
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