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- Mar 1, 2013
- Updated: 5:52am
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CNOOC
China National Offshore Oil Corporation (CNOOC) is the third-largest national oil company in China, after CNPC (parent of PetroChina), and China Petrochemical Corporation (parent of Sinopec). It focuses on exploration and development of crude oil and natural gas offshore of China. CNOOC Group is owned by the government, and its subsidiary, CNOOC Ltd is listed in Hong Kong. Another subsidiary, China Oilfield Services, is listed in Hong Kong and New York. In July 2012, CNOOC announced an agreement to acquire Nexen, a Canadian oil and gas company, for approximately US$15.1 billion.
CNOOC gives Nexen chief free rein
Chinese parent says Canadian unit has freedom to 'get operation right' but offers no details on deal done for US government approval
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Chinese oil company CNOOC, its takeover of Canada's Nexen complete, is giving the leader of the Canadian unit freedom to get operations running smoothly after an exhaustive seven-month acquisition process, CNOOC's chief said on Wednesday.
The deal, which boosts CNOOC's global oil and gas production by 20 per cent and reserves by 30 per cent, closed on Monday after clearing the final hurdle, sign-off by US regulators.
"This is a big deal. Nexen is a big organisation. We'll fully empower the management team here to get the operation right, to prioritise the strategy for the future," Li Fanrong, the chief executive of CNOOC, said at Nexen's Calgary head office.
CNOOC and Nexen executives refused to give details of what they had to do to satisfy the US Committee on Foreign Investment following its extended review. The deal needed US approval because of Nexen's Gulf of Mexico operations.
Kevin Reinhart, who was interim chief executive of Nexen for the past year, is heading up CNOOC's North and Central American operations, which adds about US$8 billion of assets to Nexen's holdings. The transaction was China's biggest foreign takeover.
CNOOC would not look to add to Nexen's assets through further acquisitions, Li said.
With the contentious deal done, CNOOC gets control of Canadian oil sands and shale gas assets as well as exploration and production holdings in the Gulf of Mexico, North Sea and offshore West Africa.
It also takes on 3,000 employees, including 1,700 in Canada. As part of its undertakings to satisfy the Canadian government that the deal would have a net benefit to the country, it has pledged to keep all the staff.
Li and Reinhart hosted a town hall meeting for the employees on Wednesday, partly to calm nerves. They told the staff it would be business as usual, despite the months of uncertainty.
Reinhart said there had been little staff turnover since the announcement, which shook up Canada's oil patch and raised fears about foreign control over the oil sands.
However, he said some incentive programmes were tied to the deal being closed, so it was not clear how many could still cash out and leave.
"It's possible that we're going to see some people make some of those decisions. That comes out of every transaction," he said.
