China National Offshore Oil Co. Cuts Dividend to Pay for Nexxen Acquisition

August 21, 2012 Share Print 0

Chinese energy giant CNOOC Ltd. said Tuesday that it is slashing its dividend amid falling profits and the need to conserve cash for its proposed US$15.1-billion purchase of Canadian oil and gas producer Nexen.

China National Offshore Oil Co., that country’s biggest offshore oil and gas producer, said Tuesday that first-half profit fell 19 per cent as costs rose and a big oil spill in China’s Bohai Bay cut production.

The company cut its dividend by 40 per cent to 15 Hong Kong cents a share to save up cash needed for the Nexen deal, part of CNOOC’s strategy of expanding aggressively overseas. That means it would pay out US$600 million less to shareholders than it did last year.

“Through the transaction, we will be able to expand our overseas business and resource base, enhance our presence in Canada, Gulf of Mexico and Nigeria, and enter the resourceful U.K. North Sea,” chief executive Li Fanrong said in a statement, adding that the deal would create “long-term value” for shareholders.

via Calgary Herald

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.