Cnooc Says Not Currently Looking for New Deals

CALGARY--Cnooc Ltd.'s (CEO, 0883.HK) chief executive said the Chinese energy giant isn't looking for any new acquisitions in the near term after completing its $15.1-billion takeover of Canadian oil-sands producer Nexen Inc. (NXY, NXY.T).

Speaking to reporters after closing the deal earlier this week, Li Fanrong said the Nexen purchase is expected to boost Cnooc's production 20% year-over-year, and the Calgary-based producer's portfolio of assets provides significant growth opportunities. It will boost Cnooc's reserves by 30%, he said.

"This is a big deal for any company to pay more (than) 15 billion U.S. dollars. In the very short term, I'm not looking" for any other acquisitions, Mr. Li said. "This is not my priority. My priority is to get this operation right. We need to better realize the full potential of Nexen's resources."

The Cnooc-Nexen deal ranks as the fifth-largest acquisition of a Canadian company by a foreign one, according to Dealogic. It's the largest foreign acquisition to date by a Chinese firm.

Cnooc required Canadian, U.S. and U.K. approval for the deal. In addition to oil sands and shale gas operations in Canada, Nexen holds significant energy assets in the Gulf of Mexico and offshore Britain.

Mr. Li didn't disclose details of the three government-approval processes beyond what the company has previously disclosed. Cnooc pledged to make Nexen's offices in Calgary as the Chinese company's headquarters for its North and Latin American operations. Cnooc will also list its shares on the Toronto Stock Exchange.

The Committee on Foreign Investment in the U.S., an interagency group that signs off on strategic foreign investments, was the last government agency to approve the deal. Cnooc and Nexen executives declined to disclose details of that approval process.

"We're not going to get into that. We can't get into the elements of the deal, because of confidentiality reasons," said Kevin Reinhart, Nexen's chief executive, who will continue to lead Nexen businesses.

The deal was approved by the Canadian government late last year after a lengthy review to determine whether the takeover was of net benefit to Canada's economy, a threshold required by federal law for foreign takeovers. Though it approved Cnooc's deal, Ottawa all but ruled out any new deals for majority control of a Canadian oil-sands player by a foreign state-owned entity.

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  02-27-132045ET
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