China National Offshore Oil Corporation Limited ("CNOOC"), a company listed in Hong Kong has announced yesterday to form a 50 percent/50 percent joint venture with Argentina oil and gas company Bridas Energy Holdings Ltd ("BEH") for a consideration of 3.1 billion U.S. dollars, Xinhua reported.

Upon completion of the transaction, CNOOC (through its subsidiary CNOOC International Limited) and BEH will each hold a 50 percent interest in Bridas, and will jointly make management decisions. CNOOC has seen its share price rising at the opening bell on March 15.

The transaction is aligned with the company's growth strategy by expanding its reach into Latin America and establishes a foundation for further growth in the region and other countries, said CNOOC. According to statistics in 2009, upon completion, the proven reserves and average daily production of CNOOC will be increased by 318 million barrels of oil equivalent and 46 thousand barrels of oil equivalent respectively, based on a proportionate basis.

The president of BEH said CNOOC is one of the most important players in the Asian oil business, and has expertise in offshore oil production. CNOOC’s strategic plan to grow production and reserves in Latin America is aligned with BEH’s objectives for its operations in the region. BEH is satisfied with this agreement, which will help BEH with oil and gas exploration and production activities in Argentina, South America and other regions in the world. He considered it a win-win deal. With this agreement, CNOOC takes a first large step into southern South American oil and gas market and BEH consolidates its presence in Central Asia, Africa and the Far East.

BEH and its affiliate companies have operations in Argentina, Bolivia and Chile. It also owns a 40 percent stake in Pan American Energy LLC.

Completion of this transaction is conditional on necessary government and regulatory approvals of China, and is expected to conclude in the first half of 2010.

Full article in Chinese: http://www.caijing.com.cn/2010-03-15/110396362.html