Libya will match China National Petroleum Corp.’s C$499 million ($443 million) offer for Verenex Energy Inc., as the North African nation seeks to retain a larger share of its oil wealth.
“The government is now arranging the funds to buy Verenex,” Shokri Ghanem, chairman of Libya’s state-run National Oil Corp., said in a telephone interview today from Tripoli.
Libya, the holder of the continent’s largest oil reserves, wants to increase its share of petroleum revenue as the budget is squeezed by oil’s slump from July’s record. National Oil is a partner of Verenex, a Canadian explorer, and a preemption clause gives Libya first right of refusal on buying the assets.
China National, the nation’s biggest oil company also known as CNPC, agreed in February to purchase Calgary-based Verenex for C$10 a share in cash.
“CNPC’s offer is final,” Ghanem said today. “It cannot increase it because it’s not like an auction; we will match it.”
Verenex, whose shares more than doubled after the company put itself up for sale in November following four straight years of losses, rose 5.6 percent to C$9 as of 10:13 a.m. in Toronto.
Ghanem said in a March 16 interview that Libya wanted to purchase Verenex for “commercial reasons,” and not to limit the access of China National to its national oil reserves. Verenex has assets in Libya that are worth “hundreds of millions” of dollars, he said at the time.
In a statement on March 18, Verenex reiterated that the proposed sale of the company to China National was subject to “certain consents” from Libya’s National Oil.
China National began exploring for oil in Libya in 2005. Verenex had agreed to pay the Chinese company a C$15 million breakup fee if the company scuttled the deal.
Source: bloomberg
