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Cnooc, Nexen resubmit deal to U.S. regulators

by Paul Whitfield  |  Published November 28, 2012 at 9:24 AM
Canadian oil company Nexen Inc. and its would-be buyer China's Cnooc Ltd. have reset the clock for U.S. approval of their $19.4 billion deal by withdrawing and resubmitting documents with the Committee on Foreign Investment in the United States.

Nexen said late Tuesday that it had refilled its so-called joint voluntary notice with CFIUS "by mutual agreement." It gave no reason for the move.

Cnooc, a subsidiary of state-owned China National Offshore Oil Corp., in July bid $27.50 per share for Calgary, Alberta-based Nexen, its partner in Canada's Long Lake oil sands project. The offer values Nexen's equity at about $15.1 billion and includes about $4.3 billion of debt.

The U.S. review will have focused on Nexen's assets in the Gulf of Mexico, and had been tipped by some analysts as a potential stumbling block for the deal.

Under the terms of the original timetable CFIUS had until the end of this week to deliver its judgment. That placed it in the delicate position of pre-empting Canadian regulators, where either approval or rejection of the deal would mark a political and investment watershed. Canada is scheduled to deliver its verdict on Dec. 10.

Nexen owns leases accounting for about 5% of Canada's oil sands reserves, though the majority of its assets are outside of Canada.

The deal also needs approval from regulators in the EU and China. Cnooc's chairman Wang Yilin said in November that he was confident of getting all the necessary approvals by the end of the year.

The refiling of the papers with CFIUS means that the regulator now has up to 75 days to rule on the proposed acquisition, including an initial 30-day period and the option to extend for a further 45 days.

The acquisition has already been cleared by U.S. antitrust regulators and by Nexen's shareholders.

Investors remain wary of the prospects of the deal being blocked by regulators. Nexen shares closed on Tuesday at C$24.10 ($24.27), down C$0.55, or 2.2%, near their lowest price since Cnooc announced its offer.

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Tags: CFIUS | China National Offshore Oil Corp. | Cnooc Ltd. | Committee on Foreign Investment in the United States | Long Lake | Nexen Inc. | oil sands | Wang Yilin

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