China Purchasing Small Canadian Oil Assets

June 23, 2014

China Oil and Gas Group Ltd. is buying a private Canadian energy company for $236-million in what has become a trend in Asian buyers launching takeovers for small firms since the Harper government imposed tougher rules on deals in late 2012.

China Oil and Gas, a natural gas distributor as well as an operator of LNG plants and compressed natural gas-filling stations in China, is buying Calgary-based Baccalieu Energy Inc., which put itself on the auction block early this year.

Baccalieu operates in west-central Alberta, concentrating on uncoventional oil and gas operations in a formation known as the Cardium.

Its senior executives, including chief executive officer Aidan Walsh and chief financial officer Scott Dyck, have agreed to stay on for at least two years to keep developing the business, China Oil and Gas said.

There have been only a handful of takeovers by foreign companies in the Canadian oil patch since Ottawa essentially closed the door on acquisitions of controlling interests in the oil sands by state-owned foreign firms when it approved the $15.1-billion takeover of Nexen Inc. by CNOOC Ltd. 19 months ago.

Copyright, The Globe and Mail, 2014.