Drilling for influence

24 Jul 2012 By John Foley Follow @johnsfoley

The bidder for Canada’s Nexen is the smallest and most Western looking of China’s three oil majors. Moreover, lines of power between China’s oil producers and politicians run both ways. CNOOC may have a gusher of governance anomalies, but foreign regulators have little to fear.

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CNOOC Limited, the listed subsidiary of China’s third biggest oil producer, announced an agreed $15.1 billion takeover of Canada-based oil and gas producer Nexen on July 23. Nexen has operations in Canada, the Gulf of Mexico, Nigeria and the UK North Sea.
The buyer is 64 percent owned by China National Offshore Oil Corp, a state-owned company. CNOOC Limited was established as a company in Hong Kong in 1999, and listed in Hong Kong and New York in 2001.
Parent company CNOOC was set up in the early 1980s to set up joint ventures for exploration and production with foreign partners. Under the listed company’s rules, the parent is prohibited from competing with CNOOC Ltd directly.

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