* CFIUS approval was final barrier for $15.1 bln deal
* No indication that conditions were imposed
* Shares rise in New York to near the $27.50 offer
By Roberta Rampton and Scott Haggett
WASHINGTON/CALGARY, Feb 12 U.S. regulators have
approved the $15.1 billion takeover of Canadian oil and gas
company Nexen Inc by China's state-owned CNOOC Ltd
, removing the final obstacle to the Asian country's
largest-ever foreign takeover.
The deal to buy Calgary, Alberta-based Nexen had already
passed regulatory muster in Canada and Europe. But approval from
the Committee on Foreign Investment in the United States (CFIUS)
was also needed because Nexen has U.S. interests.
Nexen said on Tuesday that CFIUS had given the green light
and that it expects the deal to close the week of Feb. 25, seven
months after China's top offshore oil and gas producer made its
bid of $27.50 a share.
The Nexen statement did not indicate whether CFIUS had
imposed conditions on the approval, and company officials were
not available for comment.
Nexen's shares climbed 2 percent to just below the offer
price on Tuesday, closing at $27.43, their highest level since
CNOOC made its bid for Nexen on July 23 last year.
The U.S. approval came even though widespread distrust of
U.S. investments by Chinese companies has lingered since CNOOC's
2005 attempt to buy Unocal Corp for $18.5 billion, a deal that
foundered on U.S. national security concerns.
Late last month, CFIUS cleared a bid by the U.S. unit of
China's Wanxiang Group to buy bankrupt A123 Systems Inc
, a maker of electric car batteries, although some
lawmakers warned the deal would lead to the transfer of
sensitive technology developed with U.S. government funding.
CNOOC's success in navigating the CFIUS approval process "is
likely to be viewed as a positive development," said Joshua
Zive, senior counsel at Bracewell & Guiliani, a Washington law
and lobbying firm. "That, in the current climate, is a moment of
But a U.S. legislator said he planned to introduce
legislation to block any future transactions that, like the
Nexen deal, involve the transfer of royalty-free leases.
"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 U.S. taxpayers," said
Representative Edward Markey, the ranking Democrat of the House
Natural Resources Committee.
Senator John Hoeven, a Republican from North Dakota, said
the CFIUS approval did not surprise him. But he was disappointed
the Obama administration has not moved to secure Canadian oil
supplies by approving TransCanada Corp's Keystone XL
"It shows that time doesn't stand still," he said in an
interview, noting that Canadian oil resources will go to other
parts of the world if the United States keeps dragging its heels
on pipelines. "We've got to move on projects like Keystone."
The Canadian government declined to comment on the U.S.
approval. "That's a U.S. decision," Energy Minister Joe Oliver
told reporters. "That company will, I'm sure, conduct themselves
as good corporate citizens in Canada."
OIL SANDS RESERVES
The Nexen acquisition gives CNOOC new offshore production in
the North Sea, the Gulf of Mexico and off western Africa, as
well as producing properties in the Middle East and Canada.
In Canada, CNOOC gains control of Nexen's Long Lake oil
sands project in the oil-rich province of Alberta, as well as
billions of barrels of reserves in the world's third-largest
Canada approved the takeover late last year even though some
members of the governing Conservative Party had misgivings about
China's human rights record.
But the federal government also insisted that CNOOC-Nexen
was the last deal of its kind that it would approve, drawing a
line in the sand against state-controlled companies taking
majority stakes in Alberta's strategic oil sands.
U.S. approvals took longer as legislators examined whether
the deal would threaten U.S. national security.
The United States has traditionally been more wary than
Canada of Chinese investment, prompting some speculation that
Washington might want Nexen to dispose of the U.S. assets.
Nexen released the news on a day when Washington was focused
on President Barack Obama's State of the Union address, a
nuclear test by North Korea, and deliberations in the Senate
Armed Service Committee about a vote on Obama's pick for
Secretary of Defense. In China, lunar New Year celebrations were
in full swing.