China's Cnooc Ltd.'s acquisition of Canadian energy company Nexen
Inc. could increase Asia's influence over the pricing of Brent
crude, the global oil benchmark, analysts said Monday.
The deal puts the largest crude stream that feeds into the
physical Brent benchmark into Chinese state-owned hands, allowing
exclusive insight into North Sea production issues and maintenance that
can affect the price of Brent crude and other crudes priced off of it,
analysts said.
"We've seen this year that when we had maintenance on Buzzard
[the U.K.'s highest producing field], that had a strong influence on the
price of Brent and the structure of Brent," said Olivier Jakob,
managing director of Swiss-consultancy Petromatrix. The deal will mean
better insight into prices for Cnooc, Mr. Jakob said.
Buzzard is expected to produced about 70,000 to 85,000 barrels
of oil equivalent per day net to Nexen in 2012, according to the
company's website.
Price reporting agency Platts said Monday that is was
premature to speculate on what effect the planned acquisition would have
on the Brent market, as it is still awaiting final regulatory
approvals.
"Platts is following this deal, as it would with any major
market event, and continues to be in regular contact with all key
stakeholders on any matters related to the Brent crude oil benchmark,"
it said.
Michael Hewson, senior market analyst at CMC Markets, said
Cnooc would have limited influence over the pricing because of the other
players in the North Sea, such as Norway's Statoil ASA.
"At the end of the day, they're in it to make money, so the
more oil they pump, the more money they'll make," Mr. Hewson said. "We
have to get used to Chinese companies taking over infrastructure given
the state of finances in Western companies."
Cnooc's $15.1 billion bid for Nexen was approved late Friday
by the Canadian government, but still needs U.S. and U.K. regulatory
approvals. Earlier in the year, China's Sinopec agreed to acquire 49% of
the North Sea assets owned by Canada's Talisman Energy Inc.