Singapore/Hong Kong, Jan. 9 (Reuters): CNOOC Ltd is buying a stake in a Nigerian oil and gas field for about $2 billion in what would be the Chinese offshore producer’s largest-ever overseas acquisition, people familiar with the situation said on Monday. The transaction will be announced soon, said sources, who spoke on condition of anonymity.
If completed, the purchase of a major stake in the yet-to-be-developed Akpo deepwater field, operated by global major Total, would be the largest overseas acquisition to date by the third-largest Chinese state-run oil company.
Earlier on Monday, another source familiar with the transaction said CNOOC was buying the stake.
That source declined to reveal more details of CNOOC’s planned purchase from little-known Nigerian company South Atlantic Petroleum, which sources say is controlled by former Nigerian defence minister Theophilus Danjuma.
Trading in shares of CNOOC Ltd was suspended on Monday pending an announcement about an acquisition, the Hong Kong exchange said, without giving further details. The stock finished at HK$5.40 on Friday, having risen nearly 5 per cent in the past three months.
Another source, who is familiar with the Nigerian assets, said South Atlantic Petroleum was selling its 45 per cent of the Akpo field, as well as some exploration and development rights.
The field and other assets nearby are estimated by some industry sources to have total recoverable reserves of up to 2 billion barrels in oil and gas.
CNOOC officials declined to comment.
The reported acquisition should brighten CNOOC’s production growth outlook, said Lawrence Lau, a Hong Kong-based analyst with brokerage BOCI.
“Our initial impression is the yet-to-be-developed Akpo field means there will be production upside in future,” Lau said. “If Total remains the operator, it will help CNOOC lower the risks to operate in a new country and in deepwater.”
CNOOC was a leading contender among several bidders for the asset, sources said.
The Indian government blocked Oil and Natural Gas Corp’s bid for a reported 45 per cent stake in the field last month because of unspecified risks.
