China's State Owned Energy Firm CNOOC Makes Move Into South America

CNOOC, a Chinese state-owned energy firm, has announced plans to acquire 50 percent of Bridas Energy Holdings for $3.1 billion. Bridas has holdings in Argentina, Bolivia, and Chile.

The deal is likely to foretell other similar deals by CNOOC in South America. On Sunday CNOOC president Yang Hua characterized the deal as representing a "good beachhead for us to enter Latin America," according to the Financial Times ("CNOOC to Pay $3.1 Billion for Argentine Stake," March 14, 2010).

In a statement, CNOOC said, "The transaction is aligned with the company's growth strategy by expanding the company's reach into Latin America and establishes a foundation for future growth in the region and other countries."

Proven reserves of CNOOC will increase by 318 million barrels of oil equivalent when the transaction is completed.