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Chinese oil giant CNOOC to buy Canada's Nexen for $15.1 billion

By Juwai, 24 July 2012
China moved Monday toward its biggest overseas energy acquisition, with Chinese offshore oil and gas giant CNOOC saying it has agreed to buy Canadian company Nexen Inc. for $15.1 billion. Los Angeles Times reports. July 23, 2012 -- The deal faces scrutiny from the Canadian government, which has rejected foreign interest in the past over worries about the country's natural resources industry. CNOOC and other big state-owned Chinese energy companies have increased purchases of oil and gas assets in the Americas as part of a strategy to gain access to resources needed to fuel China's economy. Calgary, Alberta-based Nexen operates in western Canada, the Gulf of Mexico, North Sea, Africa and the Middle East, with its biggest reserves in Canadian oil sands. It produced an average of 213,000 barrels of oil equivalent a day in the second quarter this year. The acquisition vastly expands CNOOC's holdings in Canada, where the company has already invested about $2.8 billion. The last time Canada faced a similar issue — when Australia-based BHP Billiton launched a hostile takeover bid for Potash Corp. of Saskatchewan — the government rejected the deal under pressure from Saskatchewan Premier Brad Wall and corporate players. CNOOC said it plans to set up its regional headquarters in Calgary and increase spending to develop the Canadian company's energy reserves. "This transaction will allow for significant investment in our business and opens the door to new opportunities for our employees," Kevin Reinhart, interim chief executive of Nexen, said in a statement. The companies already had a strategic alliance that involved CNOOC investments in Nexen offshore wells in the Gulf of Mexico.