UK has no issue with Cnooc's Nexen takeover
BY ALEXIS FLYNN
LONDON--Cnooc Ltd's $15.1 billion takeover of Canadian energy firm Nexen Inc. isn't cause for regulatory concern in Britain, where the Chinese state-run company would assume control of the country's biggest oil field, a Department of Energy and Climate Change spokesman said Tuesday.
Because the U.K. doesn't need to give formal approval of the deal, the fact that it doesn't have objections means it won't stand in the way of the deal and effectively clears the path for Cnooc to operate the 200,000 bpd Buzzard field, a key component of the Brent crude pricing benchmark.
Canada finally approved the deal last week but the U.S. still has to give its assent because Nexen also owns some oil fields in the Gulf of Mexico.
Although Nexen would be passing control of some 11% of U.K. oil supply to Cnooc, the only grounds for stopping the deal would be if there were fears that ownership was being passed to a company without sufficient technical and financial acumen, the DECC spokesman explained.
"In this instance, DECC is not raising any objections to the transfer of U.K. oil and gas assets owned by Nexen to CNOOC," said the spokesman.
The government's stance is in keeping with Britain's liberal attitude to overseas investment. The U.K. doesn't have a modern history of rejecting foreign ownership and is thought by economists to have the highest percentage of foreign ownership among major economies.
"We are open for business and keen to attract further investment for exploration and development in the North Sea," said the spokesman.
Dow Jones Newswires