China National Petroleum Corporation (CNPC) has cancelled its agreement to buy Canadian independent oil exploration company Verenex after interference from Tripoli made the transaction impossible.
In February, CNPC’s international arm CNPC International offered $10 a share in cash for the Canadian firm’s outstanding shares, valuing them at $500m (MEED 27:2:09).
CNPC International also offered Libya’s National Oil Corporation a cash bonus of $47m upon approval of the deal.
Verenex has an exploration and production-sharing agreement (EPSA) with National Oil Corporation. Under the agreement, the Canadian company must gain National Oil Corporation’s approval before any sale can take place.
“Despite Verenex having completed all the requirements of the EPSA throughout the sale process, National Oil Corporation has failed or refused to provide consent to the agreement and stated its intent to purchase Verenex subject to approval of the General People’s Assembly [Libya’s national parliament],” Verenex said in an 8 September statement.
Verenex is still in talks with Tripoli, which wants to buy the company at a reduced price.
Tripoli’s interference and the pace at which the deal was moving have frustrated the Chinese.
CNPC International declined to say whether it would bid for Verenex at a later stage.