CNOOC (Chinese) to Buy Nexen

[Tinordi]

Originally Posted by Slava

The scary part is that if the US can increase production like some people think, the price of oil will decrease by a significant amount.

Doubtful. Not impossible, but doubtful considering the resilient demand for liquid fuels and high costs of production for new marginal fields.

[c.t.ner]

I'd be curious to hear from Nexen people what their takes (i'm sure they probably don't want to post on an open forum).

I know that when I worked at Talisman people were praying that the much rumored Chinese takeover would come so people could cash in their options and bolt. (I know I was praying for it too when I was still there).

I'd be curious to see what happens with employees at Nexen to see how many stick around or how many run to other companies.

[DFO]

Originally Posted by Table 5

I don't really have a financial stake in O&G (and thus don't really know that much about the industry), but slowly giving away the controls to the single resource that gives Canada any say on the world stage doesn't really sit well with me. Whether it be American, Chinese, Dutch etc....I think it's poor long term thinking.

Giving up control in what way though? The same royalties get paid either way.

I think the Nexen deal is fine - maybe we'll see an influx of dumb money to delineate the lands further than Nexen has to date.

[HELPNEEDED]

Originally Posted by DFO

Giving up control in what way though? The same royalties get paid either way.

I think the Nexen deal is fine - maybe we'll see an influx of dumb money to delineate the lands further than Nexen has to date.

The issue with foriegn countires buying up oilsands is that they don't like to produce and thus defer royalties.

[GP_Matt]

If China wants to spend 15 billion to not produce oil then I think that is okay.

[Azure]

And I don't think they're spending $15 billion to not produce oil. My guess is they will try to invest a lot more money into increasing production and other possible buyouts over the coming years.

[Slava]

Originally Posted by Azure

And I don't think they're spending $15 billion to not produce oil. My guess is they will try to invest a lot more money into increasing production and other possible buyouts over the coming years.

The Harper presser (you read that right, he took questions!!), was a little bit cryptic. I got the impression that they aren't likely allowing anymore state owned companies to take over. That seems strange in a lot of ways. Does that mean that if Nexen wanted to buy then they can't?

All I know is that magically these two deals put us at the exact optimal level of foreign ownership in the oil sands. Its a Christmas miracle!

[Slava]

Originally Posted by Tinordi

Doubtful. Not impossible, but doubtful considering the resilient demand for liquid fuels and high costs of production for new marginal fields.

At least one analyst has called for $50 oil because of increased availability and production capabilities. I'm fully suggesting that we take those predictions with a grain of salt, because its only one report and who knows how reliable. That said, it happened with gas and the price drop was far more pronounced. Its a scary possibility for Alberta and Canada in general.

[Ironhorse]

Originally Posted by Table 5

I don't really have a financial stake in O&G (and thus don't really know that much about the industry), but slowly giving away the controls to the single resource that gives Canada any say on the world stage doesn't really sit well with me. Whether it be American, Chinese, Dutch etc....I think it's poor long term thinking.

My thoughts exactly.

They should have just put a bunch more number "4"s in the price, that probably would have had the Chinese back right off.

[wpgflamesfan]

Originally Posted by Table 5

I don't really have a financial stake in O&G (and thus don't really know that much about the industry), but slowly giving away the controls to the single resource that gives Canada any say on the world stage doesn't really sit well with me. Whether it be American, Chinese, Dutch etc....I think it's poor long term thinking.

The only problem with not involving the Americans, Chinese, Dutch, etc is that we don't have nearly enough capital to develop these resources ourselves.

[Kiran403]

Originally Posted by Slava

At least one analyst has called for $50 oil because of increased availability and production capabilities. I'm fully suggesting that we take those predictions with a grain of salt, because its only one report and who knows how reliable. That said, it happened with gas and the price drop was far more pronounced. Its a scary possibility for Alberta and Canada in general.

I also saw a couple other analysts talk of $50-$60 oil because of more production and availability but how does oil drop that much? I get the that short-term supply might increase and put downward pressure on prices but overall oil supplies and estimated supplies in the world have reached their peak so wouldn't prices still remain somewhat constant or only slightly slower as opposed to a more dramatic move?

[GP_Matt]

Originally Posted by Kiran403

I also saw a couple other analysts talk of $50-$60 oil because of more production and availability but how does oil drop that much? I get the that short-term supply might increase and put downward pressure on prices but overall oil supplies and estimated supplies in the world have reached their peak so wouldn't prices still remain somewhat constant or only slightly slower as opposed to a more dramatic move?

The prediction of lower prices is based on the assumption that we have not yet reached peak oil.

Peak oil theory hasn't been very accurate so far though and the date for peak oil keeps getting pushed back.

[malcolmk14]

Originally Posted by c.t.ner

I'd be curious to hear from Nexen people what their takes (i'm sure they probably don't want to post on an open forum).

I know that when I worked at Talisman people were praying that the much rumored Chinese takeover would come so people could cash in their options and bolt. (I know I was praying for it too when I was still there).

I'd be curious to see what happens with employees at Nexen to see how many stick around or how many run to other companies.

I'm close with a few Nexen people and can say:

New grad engineer in training: kind of tentative about the deal. Doesn't know what to expect or how to feel about it.

Senior staff 10-12 yrs with company and 25 years experience total: pretty stoked to cash in those stock options. Been looking forward to it and predicting it for 5-6 years.

If you have specific questions for either one of them pm me. They're both close enough I could ask them anything.

[Scoopdogg]

I'm at nexen and have only been here for 14 months. I wish I had been here for a few years to reap the financial rewards of this deal. Most employees are happy. I'm cautiously optimistic that it'll work out well for me. Everything we've been hearing is that it will b all good

[GirlySports]

Originally Posted by Scoopdogg

I'm at nexen and have only been here for 14 months. I wish I had been here for a few years to reap the financial rewards of this deal. Most employees are happy. I'm cautiously optimistic that it'll work out well for me. Everything we've been hearing is that it will b all good

do you need to learn mandarin soon?

[JohnnyB]

http://www.canadianbusiness.com/busi...gn-investment/

This is a good, relevant article worth reading about Canada's current treatment of foreign investment.
Broadens the discussion beyond Nexen.

Personally, having lived in China and being familiar with Chinese business and cultural practices I can say that I do harbour concerns about large Chinese companies getting taking over important Canadian businesses because of the corruption and dubious practices that are virtually integral to Chinese business. At the same time I see the losses that smaller Canadian businesses face from the fact that Canada now has a poor reputation internationally for investment and that money from countries like China are choosing to go elsewhere, such as Australia, instead because it's so much easier.

[red sky]

Encana JV with PetroChina.

http://www.theglobeandmail.com/repor...rticle6313195/

[c.t.ner]

Originally Posted by malcolmk14

I'm close with a few Nexen people and can say:

New grad engineer in training: kind of tentative about the deal. Doesn't know what to expect or how to feel about it.

Senior staff 10-12 yrs with company and 25 years experience total: pretty stoked to cash in those stock options. Been looking forward to it and predicting it for 5-6 years.

If you have specific questions for either one of them pm me. They're both close enough I could ask them anything.

Thanks for the reply. When I was at Talisman it was the same feeling (albiet the rumors of a Chinese take over never materialized). The younger guys starting out were nervous, as there wouldn't be much reward from vesting the options and leaving. While everyone else was praying and hoping so they could cash out and go to a smaller company... or at least buy a new boat.

It'll be interesting to see if there will be shifts within the core structure of the company. The Oil and Gad industry in Calgary is pretty specialized, I don't think it would be in the best interests of CNOOC to really rock the boat.

[The Yen Man]

Harper went on multiple trips to China trying to sell Canada to the Chinese. He wanted money coming into the country to help finance a lot of major projects and build less reliance on American investment.

[Hack&Lube]

Originally Posted by The Yen Man

Harper went on multiple trips to China trying to sell Canada to the Chinese. He wanted money coming into the country to help finance a lot of major projects and build less reliance on American investment.

There's a big difference between selling Canada to the Chinese and selling Canadian products to the Chinese.