Report: Chinese Firm To Buy Norway's Awilco For $2.5 Billion

July 7, 2008 3:58 p.m. EST

Hong Kong (AHN) - A subsidiary of China National Offshore Oil Corp. has offered $2.5 billion for the acquisition of drilling company Awilco Offshore ASA of Norway, reports said citing unnamed sources.

If the purchase pushes through, CNOOC's China Oilfield Services Ltd. will operate Awilco's seven oil rigs.

The offer values Awilco 19 percent higher than its market value of $2.1 billion as of July 4. The offer also includes China Oil taking over Awilco's debt estimated at $1.3 billion. In total, the offer values Awilco at about $3.8 billion.

CNOOC has earmarked $5.2 billion this year, a 44 percent increase in capital expenditures, to expand production.

The bid for Awilco is China's first attempt to break into the global oil-field services industry, which has been experiencing record growths due to soaring petroleum prices. The move was also seen to position China in addressing domestic energy demand.