Cnooc Agrees to Alter US Oil Leases
By Tennille Tracy
U.S. oil drilling leases acquired by a Chinese state-owned oil company as part of its $15 billion buyout of Canada’s Nexen Inc. are being altered as a condition of U.S. approval, people familiar with the issue said.
The U.S. formally approved the deal in February, helping to clear the way for Cnooc Ltd. 0883.HK -2.36% earlier this week to complete China’s largest foreign purchase. U.S. officials scrutinized the deal because Nexen, a Calgary-based oil and natural gas company, owned more than 200 drilling leases in the Gulf of Mexico, a primary source of U.S. oil.
The deal underwent a review by the Committee on Foreign Investment in the United States, known as CFIUS. The purpose of the committee is to analyze potential security threats resulting from foreign purchases of U.S. businesses. The committee doesn’t release its findings to the public.
One person familiar with the deal said the control structure of the leases is being changed, although Cnooc could retain ownership of the economic value of the contracts.
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