State-backed CNOOC Ltd., China's largest offshore oil producer, agreed Monday to pay $15.1 billion to acquire Calgary oil and gas producer Nexen Inc.
"We are in Canada to invest," CNOOC Chief Executive Officer Li Fanrong said in a conference call. "We intend to be a local company as much as a global one."
"The acquisition reflects our strong belief in Nexen's rich and diverse portfolio of assets and world-class management and employees."
Li said the Nexen bid is a reflection of CNOOC's "disciplined mergers and acquisitions strategy which is focused on resources, risk and return."
The transaction has received the unanimous approval of Nexen's and CNOOC's boards of directors. Nexen's shareholders are to meet by Sept. 22 to vote on the deal.
Kevin Reinhart, Nexen's interim chief executive, said the deal "will allow for significant investment in our business and opens the door to new opportunities for our employees."
Nexen is Canada's 12th largest energy company, producing 213,000 barrels of oil equivalent daily. Aside from its large oil sand and shale gas reserves in western Canada, Nexen has oil and gas assets in strategic areas overseas.
A report in Canada's Globe and Mail newspaper, however, notes that Nexen has faced hurdles in recent years at those locations: its North Sea production was affected by a new U.K. tax scheme; in the Gulf of Mexico, Nexen was hurt by the BP oil spill and its West African offshore production encountered a costly drill well.
But CNOOC said the deal between the companies "brings greater financial capacity to better realize the full potential of Nexen's significant resource base."
Also Monday, China's Sinopec said it would pay $1.5 billion for a half stake in the North Sea assets of Talisman Energy, one of Canada's top oil and gas exploration companies, also based in Calgary.
"Getting into the North Sea will help Chinese companies participate in the international oil pricing market, which is another important benefit for China in addition to the economic and energy significance of the acquisition," China Daily newspaper quoted Liao Na, information director at energy consultancy ICIS C1 Energy, as saying.
Including Monday's CNOOC and Sinopec deals, China's oil and gas overseas acquisitions total nearly $22 billion for 2012, data from energy consultant IHS Herold indicates. That compares with slightly more than $10 billion in 2011.
Lin Boqiang, director at the China Center for Energy Economics Research at Xiamen University told China Daily the acquisitions will help China "lower the risks when energy shortages become an urgent problem in the global market."