Cnooc Ltd. (883)’s deal to buy BP Plc (BP/)’s $7.1 billion stake in Argentine crude producer Pan American Energy LLC collapsed, 10 days after Argentina’s president ordered oil companies to repatriate export revenue.
BP will repay a $3.5 billion deposit it had received for the sale by Nov. 14, the company said after Bridas Corp., equally owned by Cnooc and the billionaire Bulgheroni family, announced Nov. 5 that the deal was canceled for “legal reasons.” Bridas owns 40 percent in Pan American and the purchase of the remaining 60 percent was pending Argentine antitrust approval.
The failure of the deal to buy Argentina’s biggest oil exporter means Cnooc,China’s largest offshore energy explorer, may struggle to meet its production growth targets next year, according to Gordon Kwan, Mirae Asset Securities Ltd.’s head of regional energy research in Hong Kong.
“It’s going to be very challenging for the company,” Simon Powell, a CLSA Ltd. analyst, said by phone today from Hong Kong. “Cnooc is going to have to try do more M&A deals globally to make up for it.”
Cnooc dropped 2.2 percent to HK$14.92 in Hong Kong, taking its decline this year to 19 percent. BP fell as much as 2.2 percent in London trading.
The decision comes less than two weeks after Argentina’s President Cristina Fernandez de Kirchner, re-elected on Oct. 23, ordered energy and mining companies to repatriate future export revenue in a bid to slow accelerating capital flight from South America’s second-biggest economy.