CNOOC may give up control of rigs near military base for Nexen deal
Oil and gas giant may have to give up control of rigs near major military base to win approval
China's biggest offshore oil and gas producer may have to give up control of drilling platforms 80 kilometres from a major US military base to win government approval for its US$15.1 billion purchase of Canada's Nexen.
A US panel reviewing the national security implications of the deal might be seeking to curb access by CNOOC to those Nexen platforms in the Gulf of Mexico, said Stewart Baker, a former Department of Homeland Security official.
"Typically, the national security concern is if the target company is within close proximity of a military installation where there is training or testing conducted," said Farhad Jalinous, a lawyer specialising in deals that are reviewed by the Committee on Foreign Investment in the US (CFIUS).
In the past three years, the committee has blocked at least three transactions that would have resulted in Chinese companies gaining control of assets near military facilities.
CNOOC and Calgary-based Nexen said last month they had agreed to withdraw and resubmit their application to the committee on the US part of what is mostly a Canadian transaction.
Discussions with the interagency committee, headed by Treasury Secretary Timothy Geithner, were continuing, Nexen said.