CNOOC - through its subsidiary CNOOC Muturi Ltd - has signed a Sale and Purchase Agreement (SPA) with the BG Group to acquire a 20.76% interest in the Muturi PSC for around US$98.1 million, taking its interest 64.767% and its interest in the Tangguh LNG project to 16.96%.
However, CNOOC had a strategic reason for acquiring a majority stake in Muturi. It confirmed the purchase meant it now could exercise its pre-emption rights and block Mitsui from acquiring a 50% interest in the PSC.
CNOOC did not manage to close the door on the Japanese completely as BG sold the balance of the stake to Indonesia Natural Gas Resources Muturi Inc (INGRMI), a wholly owned subsidiary of LNG Japan Corp, a joint venture between Nissho Iwai Corp and Sumitomo Corp. INGRMI will pay around US$137 million for its share of Muturi and raise its stake in Tangguh to 7.35%. It previously held a mere 1.07%.
Fu Chengyu, chairman and CEO of CNOOC was very pleased with acquiring the stakes in both Muturi and Tangguh. "With this transaction, we are pleased to further increase our stake in a world-class LNG project, said Fu.
"The Tangguh Project has made considerable progress since our initial investment a year ago and this additional purchase confirms our confidence in the project's future, he added.
These sentiments were shared by CNOOC CFO Mark Qiu, who did not rule out further forays in the acquisition market. According to Qiu, CNOOC Ltd will continue "to seize attractive acquisition opportunities to add value and diversify risks" for the Chinese giant.
The effective date of the transaction was 1 January 2004 but completion of the transaction still needs approval from the Indonesian government and partner approvals, expected to be sometime in the second quarter of 2004.
