bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

CNOOC, PetroChina eye Talisman, Santos stakes
The mainland's leading  oil companies are beginning to consider jumbo overseas acquisition opportunities again after months of quiet as oil prices soared,  with deals potentially originating in North America, Australia and Latin America.
CNOOC, the third-largest oil company on the mainland, was  in talks with Canada-based Talisman Energy in a deal that could develop into asset sales or a complete takeover, sources said.
PetroChina, the largest oil company on the mainland, was looking at taking a stake in Santos, the third-largest oil and gas company in Australia, they said.
The nation's  oil firms  and many of their global peers have been waiting since  late last year as the price of oil continued its relentless rise.
A barrel of oil reached  a record  US$135 last week and has doubled in the past year.
Commodities trader T. Boone Pickens expects to see oil at US$150 a barrel and Goldman Sachs called for as much as US$200 a barrel over the next 18 to 24 months.
The realisation that there is likely to be no end in sight to crude's climb  has persuaded  oil companies to  look at buying again before assets become  more expensive.
A more ambitious grab for  Talisman, which has a market capitalisation of US$20 billion, was definitely the size of transaction the mainland was looking for to boost its oil reserves,  sources said.
'Anything up to US$20 billion is doable in terms of market capitalisation and would be a meaningful acquisition,' said one  observer. 'You could certainly make the case because Talisman has a lot of assets.'
Spokesmen at CNOOC, PetroChina, Talisman and Santos declined to comment.
Talisman said last week that it planned to raise as much as US$2 billion from divesting some  assets by the end of next year.  The sales   would focus on oil and gas blocks in the North Sea, Australia, Trinidad and Denmark, and would begin  later this year, analysts said.
However, they are also  the type of deals that would likely excite a nationalist backlash which  the country has been trying to avoid.
'CNOOC has been very cautious with what it looks at and there's a sense of rising protectionism in Canada, so this would be just the kind of thing that they would want to avoid,' said one mergers and acquisitions banker.
CNOOC pulled out of the  US$18 billion acquisition of United States-based Unocal Corp three years ago in the face of political opposition and lost out to rival bidder Chevron, the second-largest oil company in the US.
Asset sales or an acquisition would be a turn of events for the two companies that saw each other in court last year over a stake in the BP-led Tangguh development in Indonesia.
Talisman eventually agreed to pay CNOOC US$212.5 million for a 3.06 per cent stake in the liquefied natural gas project, in which CNOOC owns 17 per cent.
Meanwhile, another source said PetroChina had 'told us they are interested [in Santos] and have asked us for ideas'.
Santos will be freed on November 29 from a 15 per cent limit  on individual stakes imposed on the company by the state government of South Australia when the company was formed.
Santos said on May 2 that it was in the early stages of 'potential strategic initiatives'.
Acquiring a stake or the US$11 billion company outright  may be a challenge for PetroChina and some of its global peers who are also interested in the company.
'With Santos they will have to come to terms with domestic gas in Australia because they have no international linkage,' said one Australian-based energy banker.
'Now that could potentially change and make it a much more international target but as it is today they will have to understand the Australian domestic gas market.'
Santos said last year that it planned to build a US$7.1 billion LNG plant in Gladstone, a city  about 500km  from the capital of Brisbane.
PetroChina was also interested in a deal with Repsol YPF, the fifth-largest oil and gas company in the world, which is considering restarting the sale of its Latin American assets that could be valued at US$10 billion, sources said.
Oil rush
Mainland firms are eyeing foreign stakes as crude continues to rise
The size of acquisitions the oil giants are looking for may be, in US$: $20b



Mainland  oil giants  targeting  big deals