Chinese owners give Nexen oil unit freedom to run operations

Wed Feb 27, 2013 8:11pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Chinese oil company CNOOC Ltd (0883.HK: Quote), its takeover of Canada's Nexen Inc NXY.TO now complete, is giving the leader of the Canadian unit freedom to get operations running smoothly after an exhaustive seven-month acquisition process, CNOOC's CEO said on Wednesday.

The deal, which boosts CNOOC's global oil and gas production by 20 percent and reserves by 30 percent, closed on Monday after clearing the final hurdle, sign-off by U.S. regulators.

"This is a big deal. Nexen is a big organization. We'll fully empower the management team here to get the operation right, to prioritize the strategy for the future," Li Fanrong, chief executive of CNOOC, told reporters at Nexen's Calgary head office.

CNOOC and Nexen executives refused to give details of what they had to do to satisfy the Committee on Foreign Investment in the United States following its extended review. The deal needed U.S. approval because of Nexen's Gulf of Mexico operations.

Kevin Reinhart, who was interim CEO of Nexen for the past year, is now heading up CNOOC's North and Central American operations, which adds about $8 billion of assets to Nexen's holdings. The transaction was China's biggest foreign takeover.

CNOOC will not initially look to add to Nexen's assets through further acquisitions, Li said.

With the contentious deal done, CNOOC gets control of Canadian oil sands and shale gas assets as well as exploration and production holdings in the Gulf of Mexico, North Sea and offshore West Africa.

It also takes on 3,000 employees, including 1,700 in Canada. As part of its undertakings to satisfy the Canadian government that the deal would have a net benefit to the country, it has pledged to keep all the staff.   Continued...

A logo of China National Offshore Oil Corp (CNOOC) is seen at the top of its headquarters in Beijing November 14, 2012. REUTERS/Petar Kujundzic