Energy

CNOOC part of joint bid $5b for Jubilee stake

(Agencies)
Updated: 2010-10-22 17:05

China's largest offshore oil producer, China National Offshore Oil Corporation Ltd (CNOOC), and Ghana National Petroleum Corp made a $5-billion joint bid to buy Kosmos Energy LLC's assets in the West African country, including its stake in the Jubilee field, Bloomberg reported on Friday, citing three people with knowledge of the matter.

The all-cash, fully financed bid was received about two weeks ago, said the source, in a Bloomberg story.

The offer tops an earlier, failed bid of more than $4 billion from Exxon Mobil Corp for the Kosmos assets, including a 23.49 percent stake in the Jubilee field, which holds an estimated 1.8 billion barrels of crude, according to Bloomberg.

State-owned Ghana National also is holding preliminary talks with Norway's largest oil company Statoil ASA, to make it a third partner in a Kosmos bid, sources told Bloomberg.

Related readings:  CNOOC starts to build 4th LNG terminal  CNOOC to co-develop 2 oilfields with Australian firms  CNOOC doubles H1 net profit  CNOOC turns to unconventional gas

Compared with Exxon and BP, China's oil companies have a relatively short history in terms of operating overseas and sometimes they have to pay a premium for the quality assets that they want, said Wang Aochao, head of China Energy Research at UOB-Kay Hian Ltd in Shanghai, in the Bloomberg report.

Sellers know that they have good financial support from the Chinese government and a real desire to acquire these assets because oil demand is rapidly growing in China, Wang said.

CNOOC has said that overseas acquisitions will help drive future growth after record output more than doubled profit in the first six months, Bloomberg said.

About 69 percent of CNOOC's revenue comes from oil and gas fields in China, according to the company's annual report. The energy producer has assets in Latin America, Nigeria, Kenya, Indonesia and Australia, Bloomberg said.

Wang of UOB-Kay Hian said the potential acquisition fits into CNOOC's strategy and this process of acquiring assets overseas will continue, particularly in Africa and Latin America, given China's growing need for oil, according to Bloomberg.