China: CNOOC Limited and BEH Jointly Made Capital Contributions in Bridas to Increase its Stake in PAE

CNOOC Limited announced that Bridas Corporation (“Bridas”), a 50/50% joint venture between CNOOC International Limited (“CNOOC International”) and Bridas Energy Holdings (“BEH”), entered into a share purchase agreement with BP PLC(“BP”), pursuant to which Bridas will acquire 60% equity interest in Pan American Energy(”PAE”) from BP for a consideration of around USD7.06 billion.

The acquisition excludes PAE’s assets in Bolivia.

CNOOC International, a wholly owned subsidiary of the Company, and BEH have agreed to contribute an aggregate amount of about USD4.94 billion to Bridas, to finance 70% of the consideration of the proposed acquisition. The contribution will be made in equal amounts, i.e. approximately USD2.47 billion, by each of CNOOC International and BEH.

The remaining 30% of the consideration, or approximately USD2.12 billion, will be satisfied by third party loans to be arranged by Bridas and/or additional contributions from CNOOC International and BEH.

Completion of the acquisition is conditional on, amongst others, all necessary government and regulatory approvals, and is expected to take place in the first half of 2011.

PAE has oil and gas exploration and production activities mainly in Argentina of South America. Currently, Bridas owns its 40% of interest, and BP owns the remaining 60%. In the last decade, PAE has established itself as the second-largest oil and natural gas producer in Argentina. PAE is also one of the few companies in Argentina to have consistently increased its oil and gas production in recent years.

Based on relevant 2009 statistics and on a proportionate basis, it is expected that, upon completion of the acquisition, the proven reserves and average daily production of the Company will be increased by 429 million barrels of oil equivalent (“BOE”) and 68 thousand BOE respectively.

Chairman of the Company, Mr. Fu Chengyu commented, “We are pleased to strengthen our partnership with BEH, one of the foremost companies in Argentina. The acquisition by Bridas will facilitate the future development of PAE, and in turn, will create more value to both CNOOC Limited and BEH.”

Mr. Yang Hua, the Vice chairman and CEO of CNOOC Limited said: “I believe, after the transaction and with the world-class oil and gas asset portfolio and existing excellent management team of PAE, we’ll be able to enhance our presence in the region, which will benefit us in the short term and long run.”

In the first half of 2010, CNOOC International and BEH have completed the formation of a 50/50% joint venture in Bridas.

Source: cnoocltd , November 29, 2010;

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