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If they succed they will be operators in the GOM using the Nexen experience rather than build their own.. This was the strategy I thought they would take... They will gain assests in Australia, West Africa and West of Shetland.. Shale gas and a raft of unconventional energy assets...
and again the US congress are trying to stop them...
http://blogs.ft.com/beyond-brics/2012/07.../#axzz22Ci3XB18
Guest post: Nexen shows Cnooc’s growing appetite for risk
July 27, 2012 1:02 pm by beyondbrics1 inShare1
1
By Simon Flowers of Wood Mackenzie
Cnooc Limited’s definitive agreement to acquire Nexen for $18.5bn marks a bold counter-cyclical move in what has been a relatively inactive market in 2012. It may also signal a new phase of Chinese national oil companies-led M&A following a lack of recent high-profile deals.
Wood Mackenzie values Nexen’s upstream commercial assets at $18.4bn. The consideration represents an implied long-term real oil price of $85 per barrel, which is in line with recent transactions.
Earlier in the year, Wood Mackenzie said that the overall production outlook for Asian companies is relatively robust in the near term, based on the primarily conventional reserves that comprise the bulk of current portfolios. However, growth in the longer term will need to be sourced increasingly by further internationalisation and participation in higher-risk areas such as oil sands, unconventionals, LNG and deepwater assets.
Nexen will take Cnooc in this direction. The portfolio comprises a balance of producing, cash-generative assets and a huge undeveloped resource base. It should provide a platform to pursue further international expansion and diversification.
Through a string of deals over the last decade, Cnooc has built up a portfolio of positions outside China, which in total comprise around 24 per cent of Cnooc’s upstream assets by net present value. After Nexen, international assets will increase to 38 per cent of the company’s upstream commercial value – placing Cnooc’s proportion of international assets higher than any other Chinese NOC so far.
Nexen’s portfolio provides Cnooc with access to substantial oil sands resources in Canada, deepwater exposure and potential for LNG (also in Canada) – all growth resource areas in which Cnooc is currently lacking. It also opens doors for Cnooc to have a production presence in the North Sea.
As with most other Asian NOCs, Chinese NOCs have had comparatively modest exposure to deepwater exploration. The acquisition of Nexen suggests Cnooc accepts that risk appetite has to increase if they are to participate in the big discoveries that will drive the industry’s growth in the next decade or two.
Nexen has identified over 100 prospects in its most promising deepwater blocks in the Gulf of Mexico. The Nigerian deepwater licences will consolidate Cnooc’s existing position in the country. Additionally, the company holds an extensive UK position of near-infrastructure and higher-risk/frontier acreage in the central North Sea, the Atlantic Margin and the northern North Sea.
Political intervention is a possible associated risk, and the Canadian government assesses acquisitions by foreign companies on the basis of net benefit to the country. The ownership of oil sands and natural gas assets is highly fragmented; and the government is likely to want sustained investment in capital-intensive oil sands and unconventional gas with LNG export potential. Other risks include the possibility of another buyer emerging.
In a wider context, the acquisition may have interesting implications for the M&A market. The large caps are currently trading at an average discount of 19 per cent to our base-case net present value following recent sharp falls in market value – and despite the industry’s planning assumptions remaining robust at around $85 per barrel. Ongoing weakness in equity markets could thus present more opportunities for cash-rich buyers.
Simon Flowers is Wood Mackenzie’s head of corporate research
and again the US congress are trying to stop them...
http://blogs.ft.com/beyond-brics/2012/07.../#axzz22Ci3XB18
Guest post: Nexen shows Cnooc’s growing appetite for risk
July 27, 2012 1:02 pm by beyondbrics1 inShare1
1
By Simon Flowers of Wood Mackenzie
Cnooc Limited’s definitive agreement to acquire Nexen for $18.5bn marks a bold counter-cyclical move in what has been a relatively inactive market in 2012. It may also signal a new phase of Chinese national oil companies-led M&A following a lack of recent high-profile deals.
Wood Mackenzie values Nexen’s upstream commercial assets at $18.4bn. The consideration represents an implied long-term real oil price of $85 per barrel, which is in line with recent transactions.
Earlier in the year, Wood Mackenzie said that the overall production outlook for Asian companies is relatively robust in the near term, based on the primarily conventional reserves that comprise the bulk of current portfolios. However, growth in the longer term will need to be sourced increasingly by further internationalisation and participation in higher-risk areas such as oil sands, unconventionals, LNG and deepwater assets.
Nexen will take Cnooc in this direction. The portfolio comprises a balance of producing, cash-generative assets and a huge undeveloped resource base. It should provide a platform to pursue further international expansion and diversification.
Through a string of deals over the last decade, Cnooc has built up a portfolio of positions outside China, which in total comprise around 24 per cent of Cnooc’s upstream assets by net present value. After Nexen, international assets will increase to 38 per cent of the company’s upstream commercial value – placing Cnooc’s proportion of international assets higher than any other Chinese NOC so far.
Nexen’s portfolio provides Cnooc with access to substantial oil sands resources in Canada, deepwater exposure and potential for LNG (also in Canada) – all growth resource areas in which Cnooc is currently lacking. It also opens doors for Cnooc to have a production presence in the North Sea.
As with most other Asian NOCs, Chinese NOCs have had comparatively modest exposure to deepwater exploration. The acquisition of Nexen suggests Cnooc accepts that risk appetite has to increase if they are to participate in the big discoveries that will drive the industry’s growth in the next decade or two.
Nexen has identified over 100 prospects in its most promising deepwater blocks in the Gulf of Mexico. The Nigerian deepwater licences will consolidate Cnooc’s existing position in the country. Additionally, the company holds an extensive UK position of near-infrastructure and higher-risk/frontier acreage in the central North Sea, the Atlantic Margin and the northern North Sea.
Political intervention is a possible associated risk, and the Canadian government assesses acquisitions by foreign companies on the basis of net benefit to the country. The ownership of oil sands and natural gas assets is highly fragmented; and the government is likely to want sustained investment in capital-intensive oil sands and unconventional gas with LNG export potential. Other risks include the possibility of another buyer emerging.
In a wider context, the acquisition may have interesting implications for the M&A market. The large caps are currently trading at an average discount of 19 per cent to our base-case net present value following recent sharp falls in market value – and despite the industry’s planning assumptions remaining robust at around $85 per barrel. Ongoing weakness in equity markets could thus present more opportunities for cash-rich buyers.
Simon Flowers is Wood Mackenzie’s head of corporate research
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