This article was last updated on April 16, 2022
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One of the China’s largest offshore oil and gas producing company, CNOOC Ltd., has agreed to fulfill all the management and employment conditions set by the Canadian government, as it paves it way through the process of negotiating an approval of its US$15.1 billion bid of taking over Nexen Inc. This news was supplied by two informants familiar with the matter, who have requested to keep the news anonymous and confidential.
The negotiators of the Canadian government had recently put forward numerous conditions, requested by Alberta Premier Alison Redford last month. One of the conditions was to guarantee that a minimum of 50% of Nexen’s board and management positions will be held by Canadians. The stock price of Nexen stock also spiked by almost 7% last week, i.e. the largest gain in any week since the state-owned CNOOC bid for the Calgary-based oil company in July, which illustrates that investors now have better hopes of the deal being approved by the Canadian government. Recent official statements of Prime Minister and federal cabinet ministers have made “favorable indications” that CNOOC’s takeover of Nexen might soon be approved.
An oil and gas analyst at National Bank Financial Group in Calgary, Kyle Preston, stated that “I think we’re close.” Preston was giving a phone interview Monday, when he quoted that “the government is looking at both the CNOOC-Nexen and the Progress-Petronas deals, which I think gives the appearance they’d like to make a decision on both at the same time and outline what the new framework is going to be for this net benefit test.”
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