|Nexen Building Calgary-Canada|
Below is part of an article with link to it from Asia Times Online.
In it it discusses the implications of China acquiring Nexen inc, a Canadian oil and gas company.
It has slightly ominous implications from this Americans point of view if interested there is a link to this original at bottom of intro to article.
MONTREAL – The US$15 billion purchase by China-based offshore oil and gas producer CNOOC of Calgary-based Nexen Inc, Canada’s sixth-largest independent oil explorer and producer, marks the biggest foreign acquisition ever by a Chinese company.
CNOOC has agreed to buy all Nexen’s outstanding common shares at US$27.50 cash per share, nearly a 62% premium over what the stock was trading at before the announcement. Total cash to be paid for Nexen’s common and preferred shared will reach US$15.1 billion. The company’s current debt of $4.3 billion will remain outstanding. The transaction will close within three to six months.
Robert Campbell writes that CNOOC will be now able to play the Brent crude oil futures market more efficiently, in addition to having the right to participate in discussions over how prices for various North Sea benchmarks are calculated.
This means that China is moving in the direction of ceasing to be merely a price taker and will gain access to information about what drives short-term price shifts that influence its import costs. It may thus also be able to influence the rules of the futures price-setting game.
The deals are also part of the Chinese firms’ continuing their worldwide search to purchase or otherwise acquire energy technology. Important in this profile is technology for exploiting shale-gas deposits, as well as the shale-gas reserves themselves. For this purpose, Chinese companies have focused on North American firms, which have developed the techniques perhaps furthest.