Challenges ahead as CNOOC acquires Nexen

BEIJING - China National Offshore Oil Corporation (CNOOC) announced Tuesday that it has closed a deal to acquire Canada's Nexen Inc.

CNOOC, China's largest offshore oil and gas producer, said in a statement on its website that the company paid about $15.1 billion for all of Nexen's common and preferred shares.

Wang Yilin, chairman of CNOOC, said the company is delighted to have gained a leading international platform through its acquisition of Nexen.

"We strongly believe that this acquisition is a good strategic fit for us and will create long-term value for our shareholders," Wang said.

The statement said Kevin Reinhart will continue to serve as CEO of Nexen, which will operate as a wholly-owned subsidiary of CNOOC.

Li Fanrong, CEO of CNOOC Limited, a listed subsidiary of the company, will chair the new Nexen board, the statement said.

Li said Nexen owns a large resource and reserve base and high-potential exploration prospects. "We will thoroughly utilize the platform it provides to further our overseas business."

Nexen runs oil sands and shale gas projects in western Canada. It also conducts conventional exploration and development operations, primarily in the British North Sea, off the shores of West Africa and in the Gulf of Mexico.

CNOOC first announced the deal in July 2012, saying the acquisition would help the company expand its overseas business and resource base in regions such as Canada, Mexico and Nigeria, according to a statement filed to the Hong Kong Stock Exchange.

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