It is official; CNOOC will buy Nexen Inc. (NYSE: NXY) for $15.1 billion!
Seven months after CNOOC first proposed the purchase the Committee on Foreign Investment in the United States (CFIUS) has finally given its approval for the deal to go ahead meaning that there are no more hurdles standing in the way of the acquisition; the largest ever foreign takeover buy a Chinese company.
As part of the acquisition CNOOC will receive offshore production assets in the North Sea, Western Africa, the Middle East, the Gulf of Mexico, and of course in Canada where its stake in the Long Lake oil sands project will give it billions of barrels of reserves in the world’s third-largest crude deposits.
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Canada approved the deal late last year, although they have promised that it will be the last of its type, unwilling to give state-owned, foreign companies a large stake in any projects involved in the strategic oil sands.
US approval remained the only obstacle, needed due to the Nexen assets held in the Gulf of Mexico, and was slow to be given as authorities determined the threat to US national security.
Back in 2005 the US had blocked CNOOC’s bid for Unocal Corp. over national security concerns, and last year US companies were urged not to do business with any Chinese telecommunication companies due to fears that China could use technologies developed in any partnership to spy on government activities.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com