Nexen-CNOOC deal receives US approval

By OGJ editors

[Editors Note: Story updated with Markey comment]

Nexen Inc. received approval from the Committee on Foreign Investment in the United States (CFIUS) regarding its CNOOC Ltd.’s $15.1 billion acquisition of Nexen.

All of the requisite approvals have been received now for the transaction to proceed to close, Nexen said. That includes approvals from Canada, the UK, the European Union, and China (OGJ Online, July 30, 2012).

Closing is expected the week of Feb. 25, Nexen said. Nexen's assets in the UK, US, and other countries will continue to be managed from its regional offices, and CNOOC will retain the current management and employees in those operations.

Previously, CNOOC said it is committed to Nexen's assets in the UK and will maintain its operations in the Gulf of Mexico and offshore Nigeria.

In response to what he called the potential transfer of US royalty-free drilling to CNOOC as part of the deal, Rep. Edward J. Markey (D-Mass.) said he will introduce legislation giving the US Interior Secretary new authority to block "a loophole preventing the approval of similar lease transfers in the future."

“Chinese government-owned oil corporations should not be allowed to drill for American oil in the Gulf of Mexico without paying a dime in royalties to US taxpayers,” Markey said. “The Interior Department should have the authority to review all possible transfers of oil and gas leases on public lands so that we can prevent massive wealth transfers from US taxpayers to foreign governments.”  

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