Nexen takeover deadline extended by 30 days

CNOOC Ltd. and Nexen Inc. have extended a deadline to complete the $15.1-billion (U.S.) takeover of the Canadian oil and gas company as they await U.S. regulatory approval.

The deal, the largest Chinese overseas takeover in history, was to have expired Jan. 31, 2012. The deadline has now been pushed back by 30 days, but the clock is ticking. Under the terms of the deal, it can only be extended 75 business days beyond Jan. 31.


The takeover has already cleared regulatory hurdles in Canada, the United Kingdom, the EU and China.

The major holdout is the U.S., where the Committee on Foreign Investment in the United States, or CFIUS, is examining the deal.

Part of the CFIUS mandate is to examine the impact of financial transactions to U.S. security. That review has been lengthy.

After an initial 75-day review window expired in November, Chinese state-owned CNOOC was forced to “pull and refile” its application, a move that triggered market concern.

In recent weeks, however, investors have acted with substantial confidence that the deal will be consummated, with Nexen’s New York shares closing Friday at $26.97, not far from the $27.50 offer price.

About 12 per cent of Nexen’s energy production comes from the U.S. Gulf Coast, a region that is one of the pillars of the company. Parts of it are also politically sensitive.

Though Nexen is a minority partner and non-operator in most of its U.S. offshore projects, it owns a number of leases that, thanks to a generous incentive program, are virtually royalty-free.

Observers have speculated that Nexen may be forced to divest some of those properties, although officials with CNOOC have, in the past, argued that the Gulf of Mexico is fraught with substantial risk, and will require large amounts of investment to develop.

Still, others have warned that CFIUS may be concerned about the proximity of some Nexen assets to areas used by the U.S. military.

They have also highlighted a potential reciprocity concern, given that U.S. firms face investment restrictions in numerous Chinese sectors.

Alberta premier warns of $6-billion shortfall in oil revenue

CALGARY, Alberta — Alberta’s premier warned on Thursday that the Western Canadian province faced a $6 billion shortfall in revenue due to deeply discounted prices for its crude oil but offered no specifics on how to prevent falling deeper into the red.

Alberta’s financial forecasts have been thrown into disarray by fast-growing output from its vast oil sands and limited pipeline capacity to move it to markets in the United States and elsewhere. That has pulled the price of a barrel down to less than half that of international benchmark Brent oil.
The situation has prompted Premier Alison Redford and her government to warn of a tough budget on March 7, and raised questions about her ability to meet a promise of erasing its budget deficit in the upcoming fiscal year.

Quite simply, we have to put Alberta’s finances on a more stable footing. A province as prosperous as Alberta should not be as susceptible as we are to swings in the price of oil and gas

In an eight-minute televised address, Redford explained the reasons for the sharply reduced take from Alberta’s biggest industry and pledged not to raise taxes to make up the difference, but did not say where she will cut spending.

 

In fact, she made note of strong desire in the province of 3.8 million people for new roads, schools and healthcare facilities.

“Despite falling oil revenues, I give you my commitment that as we deliver our long-term economic plan for Alberta, we will be thoughtful in our approach and we will deliver on these priorities,” she said.

Alberta is Canada’s largest oil-producing province and the largest foreign energy supplier to the United States, and had become used to boom times until the oil market weakened last year.
Redford has been an enthusiastic promoter of TransCanada Corp’s contentious Keystone XL pipeline, which would carry Alberta’s crude to refineries in Texas.

The project took a series of steps forward this week as the governor of Nebraska approved a new route for the long-delayed project through the state and 53 U.S. senators urged U.S. President Barack Obama to approve it. However, Obama’s decision is not expected for several months.
Alberta is considering a host of other potential routes to new markets that could lead to higher returns, but Redford cautioned that long-term solutions will not be quick.

In the meantime, Alberta, which derives 30% of its overall revenue from the oil industry, will be $6 billion short of its revenue target for the upcoming fiscal year, she said.

Recently, the bitumen crude from the oil sands has sold for more than $40 a barrel below U.S. light crude, leading the Bank of Canada this week to also point out the national economy was feeling the effects as well.

“It will take focus and determination over the next several years to open new markets. And that is job one for my government,” Redford said.

The Progressive Conservative government, in power since 1971 and re-elected last year, is being pilloried by its opponents for forecasts they say that have been far too rosy, for relying too heavily on the fortunes of a highly cyclical industry and for tapping debt markets.

“It doesn’t do any good to talk about how we might have pipelines four or five or six years from now,” said Danielle Smith, leader of the opposition Wildrose Party. “What is the plan over the next three or four or five years to get us accustomed to this new reality of lower energy prices and lower revenues?”

Redford was vague as she cautioned about upcoming spending cuts in programs and services “that are not sustainable over the long term.”

“Quite simply, we have to put Alberta’s finances on a more stable footing. A province as prosperous as Alberta should not be as susceptible as we are to swings in the price of oil and gas.”

Nexen 收购获批：加拿大政府批准该公司收购Nexen的交易

中国海洋石油有限公司(CNOOC Ltd. ADS, CEO, 简称：中国海洋石油)周六证实，加拿大政府批准了该公司以151亿美元收购Nexen Inc (NXY)的交易。

这样，中国海洋石油就为完成此项收购交易扫除了一个主要障碍。这项交易将成为中资企业规模最大的海外收购交易，也是迄今为止海外国有企业进军北美能源行业最令人瞩目的一笔收购交易。

中海油董事长王宜林在公告中表示，中海油收购Nexen的提议获得了加拿大工业部的批准，公司对此十分高兴。加拿大工业部认可了中海油收购Nexen的提议将给卡尔加里、阿尔伯达乃至整个加拿大带来长期经济利益。

中海油将把其北美和中美业务的总部设在卡尔加里。该公司还将保留Nexen现有的管理团队和员工。

公告称，中海油还将投入可观资金，作为促进加拿大石油和天然气资源开发的一个长期承诺。

香港--中国海洋石油有限公司(CNOOC Ltd. ADS, CEO, 简称：中国海洋石油)周六证实，加拿大政府批准了该公司以151亿美元收购Nexen Inc (NXY)的交易。

至此，中国海洋石油为完成此项收购交易扫除了一个主要障碍。这项交易将成为中资企业规模最大的海外收购交易，也是迄今为止海外国有企业进军北美能源行业最令人瞩目的一笔收购交易。

中海油董事长王宜林在公告中表示，公司对加拿大工业部批准此项收购提议感到高兴。中海油收购Nexen的交易将给卡尔加里、阿尔伯达乃至整个加拿大带来长期经济利益。

中海油将把其北美和中美业务的总部设在卡尔加里。该公司还将保留Nexen现有的管理团队和员工。

公告称，中海油还将投入可观资金，作为促进加拿大石油和天然气资源开发的一个长期承诺。