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Analyst: CNOOC-Nexen deal looks good

Oct. 25, 2012 at 9:15 AM

HONG KONG, Oct. 25 (UPI) -- A deal by a Chinese company to acquire Canadian rival Nexen is still favorable despite Ottawa's reservations about a similar Malaysian bid, an analyst said.

China National Offshore Oil Corp. in July offered to take over Nexen for $15 billion. Around 90 percent of the Nexen shareholders voted in favor of the deal last month.

Terms of the agreement with CNOOC, however, are subject to the approval of the provincial government of Alberta.

The CNOOC deal was cast into doubt when Canadians Minister of Industry Christian Paradis sent a letter to Malaysian energy company Petronas expressing reservations over a $6 billion bid for Canada's Progress Energy.

Beijing warned Canadian authorities not to politicize the proposed takeover. Gordon Kwan, an energy analyst from Mirae Asset Securities Ltd. in Hong Kong, told Bloomberg News that CNOOC's offer translated to long-term economic benefits for Canada.

"The odds still favor CNOOC winning approval," he said.

CNOOC, under the terms of the proposal, would set up its regional headquarters in Calgary. The company would take on Nexen's assets in Canada, the U.S. Gulf of Mexico, Nigeria and the British North Sea.

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