Britain says it won't stand in way of Nexen-CNOOC deal

Tue Dec 11, 2012 10:51am EST
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By Karolin Schaps

LONDON (Reuters) - Britain will not stand in the way of a $15.1 billion takeover of Nexen NXY.TO by CNOOC (0883.HK: Quote), allowing the Chinese company to snap up the Canadian group's stake in a major North Sea field that helps set the Brent global oil benchmark.

While Canada approved the deal on Friday, Nexen's chief executive said on Monday China's biggest ever foreign takeover was nowhere near done.

A further decision on the transaction rests with a U.S. foreign investment panel which gets a say because Nexen has exploration and production assets in the Gulf of Mexico.

Britain's clearance of the deal is also important because Nexen has 43 percent of the Buzzard oilfield, Britain's largest and pumping about 200,000 barrels per day.

"We will not stand in the way," Mike Hawkins, head of oil and gas license administration at Britain's Department of Energy and Climate Change (DECC), told Reuters. "The license does not change, no formal approval is needed," he said, adding the department has had discussions with CNOOC and Nexen.

Analysts and traders have long noted China's growing appetite for North Sea oil, which is key to determining global prices.

In addition to the CNOOC-Nexen deal, China's top refiner Sinopec (0386.HK: Quote) is also buying 49 percent in the UK unit of Talisman TLM.TO for $1.5 billion.

Wood Mackenzie consultancy estimated both firms would directly own 13 percent of all UK liquids production if both deals went through.   Continued...

A woman walks into the Nexen building in downtown Calgary, Alberta, July 23, 2012. REUTERS/Todd Korol