Investing

U.S. Greenlights Cnooc Acquisition of Nexen

Offshore drill rig
Thinkstock
The Committee on Foreign Investment in the U.S. (CFIUS) has given its approval to the $15.1 billion acquisition of Nexen Inc. (NYSE: NXY) by China’s Cnooc Ltd. (NYSE: CEO). The Canadian government approved the deal last December, and today’s announcement clears the way for the a final closing on the sale.

The U.S. approval was needed because about 10% of Nexen’s assets are located in the U.S., primarily in the Gulf of Mexico. The U.S. decision to allow the deal to go ahead is likely due to a lack of national security issues, although neither the U.S. government nor Nexen has made a statement.

When Cnooc made an $18.5 billion offer to acquire Unocal in 2005, the Chinese firm withdrew its offer before it even went to CFIUS for consideration. Chevron Corp. (NYSE: CVX) ultimately acquired Unocal.

Canada’s prime minister, when he announced his government’s approval of the deal, made it pretty clear that the country does not want its natural resources to be acquired by companies controlled by foreign governments: “To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead.” He sent so far as to say the further foreign state control of Canada’s resources would not be a benefit to the country.

Chinese firms have taken stakes in a number of U.S. energy companies, primarily those that are drilling for oil and natural gas in the various shale plays. Chesapeake Energy Corp. (NYSE: CHK) and Devon Energy Inc. (NYSE: DVN) have both given up significant shares in oil and gas leases in exchange for cash.

It’s Your Money, Your Future—Own It (sponsor)

Retirement can be daunting, but it doesn’t need to be.

Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!

Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.