CNOOC Buys Nexen for $15.1 Billion

Nexen, Calgary | BCBusiness
Calgary-based Nexen will soon be under foreign ownership as one of China’s state-owned oil companies offered to purchase Nexen for $15.1 billion in cash.

One of China’s biggest oil companies is getting a major foothold in Alberta oilsands as CNOOC offers cash for Calgary-based Nexen.

One of the up-and-coming producers in Alberta’s oilsands is now completely foreign owned.

On Monday, Calgary-based Nexen Inc. agreed to a deal with the Chinese National Offshore Oil Company. State-owned CNOOC offered $15.1 billion for the company, in cash, or $27.50 per share.

While the takeover won’t be finalized until it receives the green light from shareholders and the federal government, such a massive investment will most assuredly make it through the gauntlet of required approvals.

The federal government will be pleased that the Chinese company plans to maintain all of Nexen’s management staff and keep its Canadian operations headquarters in Calgary. And shareholders will be delighted at the mammoth injection of funds.

Nexen has struggled in recent years, mostly in its efforts to get its Long Lake site just outside of Fort McMurray, Alta., up and running. The site still isn’t producing at its designed capacity, and its most recent quarterly profits were 50 per cent below forecasted estimates.

Considering all the challenges the company has faced recently, it’s unlikely Nexen will receiver a better bid.