Profits fall for offshore oil producer

HONG KONG— CNOOC Ltd. reported lower 2012 profits that missed analyst estimates, as China’s biggest offshore oil producer spent more to revive output growth, an effort underscored by its $15.1-billion (U.S.) takeover of Canadian oil producer Nexen Inc.

Net income fell to 63.7 billion yuan ($10.3 billion) in the 12 months ended Dec. 31from 70.3 billion yuan a year earlier, the company said in a statement to the Hong Kong stock exchange Friday. That compared with the 65.3 billion yuan mean of 29 analyst estimates. Sales climbed 2.8 per cent to 247.6 billion yuan.

CNOOC’s purchase of Nexen, China’s largest foreign acquisition, will be a platform for future growth, chief executive officer Li Fanrong said at a news conference in Hong Kong. The company, which operates in Canada’s oilsands, the North Sea and offshore West Africa, will add 20 per cent to CNOOC’s production and 30 per cent to reserves.

The deal cleared the final regulatory hurdle last month after CNOOC relinquished operating control of rigs in the Gulf of Mexico. Li said that Chinese companies will increasingly win foreign acceptance. “State-owned companies like us have no difference with western companies in terms of business operations,” he said. “China’s stateowned enterprises will be more and more welcomed by the host countries of natural resources.”

The Nexen transaction, which closed Feb. 25, spurred the Canadian government to say future acquisitions in oilsands by state-owned foreign companies would be rejected barring “exceptional circumstances.”