CNOOC Expects Nexen Deal to Be Completed in 1Q 2013

CNOOC Expects Nexen Deal to Be Completed in 1Q 2013

HONG KONG - CNOOC Ltd., China's largest offshore oil-and-gas producer by capacity, said Friday it expects its proposed $15.1 billion purchase of Canada's Nexen Inc. to be completed in the first quarter of 2013.

A CNOOC spokeswoman said the deal is still awaiting overseas government approval so it couldn't be closed in the fourth quarter, as originally planned.

Earlier this month, Canada approved CNOOC's proposed acquisition of Nexen, clearing a major hurdle for the Beijing-based energy giant in completing what would be China Inc.'s biggest ever foreign acquisition. It is also the most ambitious bid by a foreign government-owned entity so far to enter North America's booming energy industry. The deal is now waiting approval by the U.S. government.

CNOOC and Nexen were already partners in developing Canada's oil sands. The Chinese company acquired Nexen's bankrupt partner, OPTI Canada Inc., which was involved in the Long Lake oil sands project, in 2011. CNOOC launched its all-cash bid for Nexen on July 23, offering $27.50 a share, or a premium of over 60% versus the share price on the last trading day before the two companies announced their proposed transaction.

For CNOOC, the Nexen deal comes seven years after the Chinese company's 2005 failure to acquire Unocal Corp. for $18.5 billion.

Copyright (c) 2012 Dow Jones & Company, Inc.

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