CNOOC to purchase half of Bridas for $3.1 billion

CNOOC International Ltd. plans to buy 50% of Bridas Corp. from Bridas Holdings Ltd. for $3.1 billion, expanding CNOOC’s worldwide assets.

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Mar. 15 -- CNOOC International Ltd. plans to buy 50% of Bridas Corp. from Bridas Holdings Ltd. for $3.1 billion, expanding CNOOC’s worldwide assets.

Bridas currently has oil and gas operations in Argentina, Bolivia, and Chile. Bridas holds 40% interest in Pan American Energy, and BP PLC owns the rest.

Bridas, a wholly owned subsidiary of Bridas Holdings, plans to change its name upon the transaction’s completion, which depends upon regulatory approvals. Closing is expected by June 30.

CNOOC and Bridas Holdings each plan to hold 50% interest in Bridas and jointly will make management decisions.

The Bridas investment will add 318 million boe of proved reserves to CNOOC and also boost its average production by 46,000 boe/d, the company estimated.

Fu Chengyu, CNOOC Ltd. chairman and chief executive officer, said in a news release, “This joint venture is aligned with our philosophy of seeking partnerships to expand our global footprints.”

Speaking to a Bloomberg reporter in Beijing on Mar. 14, Fu said CNOOC is looking at acquiring additional assets worldwide.

Chinese investing
Chinese oil and gas companies have boosted their investments abroad since 2008, having committed billions of dollars into developing large fields in the Middle East and elsewhere (OGJ, Feb. 8, 2010, p. 21).

A January brief from FACTS Global Energy analysts in Singapore said China National Petroleum Corp. was the biggest investor abroad among Chinese companies since late 2008. CNOOC was listed as second in its overseas investments.

CNOOC’s unsuccessful attempt to purchase Unocal Corp. in 2005 demonstrated political opposition within the US to corporate takeovers of US oil and gas assets by Chinese oil companies.

Chris Sheehan, IHS Herold Inc. director of merger and acquisition research, said strategically driven Asian national oil companies will continue their quest to secure global energy supply through the M&A market this year (OGJ, Mar. 15, 2010, p. 27).

Contact Paula Dittrick at paulad@ogjonline.com.

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