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| CNOOC Taps Nigerian Oil Resources |
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Hong Kong-listed CNOOC yesterday announced it had signed a definitive agreement with South Atlantic Petroleum Ltd to acquire a 45 percent working interest in an offshore oil mining license, OML 130. The purchase will be funded by internal resources of CNOOC, the company said in a statement. Earlier yesterday, CNOOC had requested its stock to be suspended from trading on the The deal is expected to be sealed in the first half of this year, and still requires the approval of Nigerian National Petroleum Corp (NNPC) and the Chinese government, CNOOC said. The oil block, operated by global oil company Total, contains the Akpo deepwater field, which is set to come on-stream in the second half of 2008. CNOOC said it would contribute capital expenditure of more than US$2 billion to develop the field. The Akpo field, about 200 kilometers off the coast of Port Harcourt, will have the capacity to pump 225,000 barrels of oil a day after 2008, or nine percent of Nigeria's current production, according to operator Total SA. When production peaks, estimated to be in 2009, CNOOC's light oil entitlement from the block will be nearly 79,000 barrels a day, Yang Hua, CNOOC's chief financial officer, said. "The purchase of this interest in OML 130 helps CNOOC gain access to an oil and gas field of huge interest and upside potential, located in one of the world's largest oil and gas basins," said Fu Chengyu, chairman and chief executive of the Beijing-based offshore oil producer. "The acquisition is in line with our goal of creating shareholder value, and it will add to our production targets and is within our pricing range," Yang told reporters. "Before the Akpo field starts production in the first half of 2008 we'll have a very small dilution in earnings per share. But after that, it will be one of the factors boosting earnings," Yang said. CNOOC said it is paying US$4.60 per barrel of oil equivalent (BOE) for the main part of its Nigerian acquisition. "It is obviously a very attractive price," Yang said. CNOOC was a leading contender among several bidders for the asset, sources said. The Gordon Kwan, director of China Oil and Gas Research with Hong Kong-based CLSA brokerage, said the rationale to acquire overseas reserves is to diversify risk, for oil and gas, and seize opportunities that could provide operational synergies with existing projects, while minimizing independent exploration risks. "With potential gross recoverable reserves that could surpass one billion barrels, the OML is one of the world's giant oil discoveries. The deal will allow CNOOC to gain deepwater expertise," Kwan said in an e-mail statement to customers. Other partners in the field are NNPC and Petrobras. ( |
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