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China Oilfield says to make offer for Norway's Awilco

by Staff Writers
Hong Kong (AFP) July 7, 2008
China Oilfield Services, a subsidiary of energy giant China National Offshore Oil Corporation (CNOOC), said Monday it had offered to buy all the shares in Norwegian oil firm Awilco Offshore.

If accepted by shareholders the deal would be worth 19.5 billion Hong Kong dollars (2.5 billion US), CNOOC said in a statement to the Hong Kong Stock Exchange.

"The business currently operated by (Awilco) has high growth potential, the pursuit of which is in line with the growth and globalisation strategy of (China Oilfield)," the mainland firm said in the statement.

The offer represents an 18.7 percent premium over the closing price of Awilco shares when they traded on the Norwegian stock exchange on Friday, the statement said.

Awilco's major shareholders, who own around 40 percent of the company, had agreed to the sale and the board was recommending that shareholders accept it, the statement said.

The deal is the latest attempt by China to feed its rapidly increasing demand for energy using overseas acquisitions and partnerships. It has extensive oil interests in Africa, most notably in Sudan and Angola.

CNOOC, China's third largest oil company, has been linked to potential stakes in both Canadian-based Talisman Energy and Australian oil and gas company Santos, reports earlier this year said.

China Oilfield has been looking to take stakes in overseas rivals to boost its operating capacity. It previously failed in an attempt to buy a stake in Russia's STU.

Awilco, based in Oslo, operates five jack-up rigs and two accommodation units in Norway, Vietnam, Saudi Arabia and the Mediterranean, giving China Oilfield access to several international markets, according to the statement.

Oil firms have shied away from acquisitions in recent months, waiting for a correction in skyhigh oil prices.

But the apparently relentless rise of crude -- which has now passed 140 US dollars a barrel -- has led to concern that companies should make a move before potential buys become too expensive.

- Dow Jones Newswires have contributed to this report -

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