Is this the start of another new China trend? M&A bankers have long predicted that WTO entry will not just mean foreigners buying assets in China, but top Chinese firms buying abroad too.
Barely a fortnight into 2002 and CNOOC, the highly regarded Chinese oil company taken public last year by CSFB and Merrill Lynch, has done just that.
CNOOC will buy the offshore Indonesian assets from Repsol-YPF for $585 million. The acquisition will make CNOOC the largest offshore oil producer in Indonesia.
CNOOC's highly regarded CFO, Mark Qiu tells FinanceAsia: "while we have always said we will focus our business on developing offshore fields in China, we have also publicly said that we will do deals abroad on a selective basis if they make sense from a shareholder value perspective. This is one such deal."
Qiu says the Indonesian assets will comprise about 10% of CNOOC's total assets. The fields have 360 million barrels of proven oil reserves.
The deal was brought to CNOOC by Merrill Lynch, which was the sole investment bank on the deal. Repsol had publicly put its Indonesian assets on the block three years ago, but it is a sign of recovering confidence in Indonesia that only now does anyone seem interested.
Qiu says that CNOOC is very comfortable with the production sharing contracts with the Indonesian national oil company, Pertamina, saying they are very similar to the contracts CNOOC itself has with the Chinese government.
