Nexen (TSE:NXY) (NYSE:NXY) and China's CNOOC have agreed to extend the deadline for their takeover agreement to March 2 as they await the verdict from the Committee on Foreign Investment in the United States on the $15.1 billion deal.
The deadline was originally scheduled for January 31. Either party can extend the date if the required regulatory approvals have not yet been received, provided that the total extensions not exceed 75 business days from January 31.
The deal - the largest-ever foreign acquisition by a Chinese company - still needs U.S. regulatory approval, after the two companies got the okay from Canada, the U.K., the European Union and China.
Nexen also said Sunday that it would, in connection with the extension, postpone the release of its fourth quarter results.
China's state-owned CNOOC and its Canadian takeover target Nexen resubmitted an application for U.S. approval of their $15.1-billion deal late last year.
Following the proposed deal, CNOOC intends to set up a head office in Calgary, which will be responsible for operating and growing Nexen’s assets in North and South America, Europe, West Africa as well as Central America.
CNOOC is an independent oil and gas explorer and China's largest producer of offshore crude oil and natural gas. The proposed deal is expected to bolster CNOOC’s presence in Canada, Nigeria and the Gulf of Mexico, while adding a significant presence in the U.K. North Sea.
Nexen is a global oil and gas company that produced 207,000 barrels of oil equivalent per day at the end of 2011. Only about 30 per cent of Nexen's production comes from its Canadian operations, with the rest coming from offshore platforms in the North Sea, Gulf of Mexico and West Africa.
CNOOC and Nexen were working together before the takeover deal was announced. In 2011, CNOOC acquired Opti Canada Inc., Nexen's partner in the Long Lake oilsands project and the two have been working together on that project since.
Later in 2011, CNOOC and Nexen formed a joint venture in the Gulf of Mexico. Around the same time, Nexen also agreed to sell a 40 per cent stake in some of its northeastern British Columbia shale natural gas lands to a Japanese-led consortium.