CNOOC Deals for Nexen

Monday, July 23, 2012 @ 06:07 PM gHale

Oil and gas producer Nexen Inc. will pick up $15.1 billion China National Offshore Oil Company (CNOOC) struck a deal for the Calgary, Canada-based company.

“This transaction will allow for significant investment in our business and opens the door to new opportunities for our employees,” said Nexen chief executive Kevin Reinhart.

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As part of the transaction, CNOOC said it plans to list its shares on the Toronto Stock Exchange. It also intends to have a head office in Calgary to oversee its North and Central American operations.

CNOOC also said it intends to keep Nexen’s existing management and staff.

Nexen has faced numerous challenges over the past few years, most recently the troubled launch of its Long Lake oil sands project in northern Alberta. The project has yet to come close to its design capacity of 72,000 barrels of bitumen per day due to a number of operational glitches.

Last week, the company reported second-quarter profits tumbled more than 50 percent as it took a charge on an unsuccessful well in the Gulf of Mexico.

In January, Nexen had a major management shakeup, with Marvin Romanow leaving his post as chief executive and Gary Nieuwenburg stepping down as the executive vice-president of the company’s Canadian operations.

Reinhart was previously the company’s chief financial officer.

Nexen’s original partner at Long Lake, Opti Canada, filed for court protection from creditors last summer and CNOOC later acquired it for $2.1 billion.

The Chinese company has made several other investments in Canadian companies over the past seven years, including buying stakes in MEG Energy Inc. and a 60 percent investment in Northern Cross (Yukon) Ltd.

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