Cnooc / Nexen - wider reach The suspense is over. Canada has cleared the way for Cnooc, the state-controlled oil and gas producer, to buy Nexen, in a deal valued at about $18bn, including debt. Acquiring the Canadian oil company goes a long way to advancing Cnooc's aspirations for growth: annual production will rise by a fifth and proven and probable reserves by more than a third. In addition to Canada's oil sands - 70 per cent of Nexen's proven and probable reserves - Cnooc gets Nexen's assets in the North Sea, the Gulf of Mexico and Nigeria. That raises Cnooc's production outside China to a third, from a sixth in 2011. Nexen's shareholders, who accepted the $27.50-a-share deal by a 99 per cent margin, are getting a 61 per cent premium to the company's undisturbed share price. But Cnooc still does not seem to be widely overpaying: measuring the deal in terms of dollars per barrel of oil equivalent shows the price is roughly in line with recent big oil and gas acquisitions. Canada, for its part, is not relinquishing too much. Nexen represents less than 1 per cent of the country's proven and probable reserves. Meanwhile, Canada's oil sands require substantial investment at time when US investors are mesmerised by shale gas at home. For this international growth, Cnooc's minority shareholders will see a drop in the company's now very high return on equity, which will fall 5 percentage points, to 15 per cent, Macquarie estimates. It is now up to Cnooc to prove itself as the manager of its wider reach. Stay tuned.