BEIJING (AFX) - A reported bid by China's CNOOC Ltd for Nations Energy, a private oil producer in Kazakhstan, could stress the company's balance sheet, analysts said.
Media reports said today that CNOOC is likely to bid for the private Kazakhstan company headquartered in Canada and valued at around 2 bln usd.
The new bid comes just days after CNOOC unveiled plans to buy a 45 pct stake in an oil block off the coast of Nigeria for 2.3 bln usd.
"Another 2 bln usd acquisition cost will add stress to (CNOOC's) financial position; as such it might adversely affect its credit rating and future financing costs," Ma Shang with Fitch Ratings said.
"Moreover, it seems unwise for CNOOC to engage in such two sizable acquisitions within a short period considering the possible operational risks involved during the consolidation process," he added.
However, while CNOOC does not currently have enough cash to fund the acquisition, analysts do not rule out the acquisition altogether.
"CNOOC's balance can change and they have many ways to fund the acquisition," Xioaming Song, an oil analyst with S&P said.
"It also depends on timing," she added.
In December a China National Petroleum Corp (CNPC) source told XFN-Asia that the company was also preparing a bid for the Kazakhstan company.
A report published in The Standard today said that CNPC had decided to drop the bid after purchasing Canadian-listed PetroKazakhstan, the central Asian country's third-largest oil producer, for 4.18 bln usd.
Spokespersons at CNPC and CNOOC declined to comment.
The Standard report said Citigroup was advising CNOOC while Credit Suisse was advising Nations Energy.
virginie.mangin@xinhuafinance.com
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Media reports said today that CNOOC is likely to bid for the private Kazakhstan company headquartered in Canada and valued at around 2 bln usd.
The new bid comes just days after CNOOC unveiled plans to buy a 45 pct stake in an oil block off the coast of Nigeria for 2.3 bln usd.
"Another 2 bln usd acquisition cost will add stress to (CNOOC's) financial position; as such it might adversely affect its credit rating and future financing costs," Ma Shang with Fitch Ratings said.
"Moreover, it seems unwise for CNOOC to engage in such two sizable acquisitions within a short period considering the possible operational risks involved during the consolidation process," he added.
However, while CNOOC does not currently have enough cash to fund the acquisition, analysts do not rule out the acquisition altogether.
"CNOOC's balance can change and they have many ways to fund the acquisition," Xioaming Song, an oil analyst with S&P said.
"It also depends on timing," she added.
In December a China National Petroleum Corp (CNPC) source told XFN-Asia that the company was also preparing a bid for the Kazakhstan company.
A report published in The Standard today said that CNPC had decided to drop the bid after purchasing Canadian-listed PetroKazakhstan, the central Asian country's third-largest oil producer, for 4.18 bln usd.
Spokespersons at CNPC and CNOOC declined to comment.
The Standard report said Citigroup was advising CNOOC while Credit Suisse was advising Nations Energy.
virginie.mangin@xinhuafinance.com
vm/tr
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2006 AFX News
