China's leading oil field services provider COSL has reportedly been in advanced talks to buy Norwegian rival Awilco Offshore ASA, in a deal worth more than US$2 billion.
If successful, this would help boost the overseas business development of COSL (China Oilfield Services Ltd), which failed to buy Russia's STU, a unit of TNK-BP, earlier this year in a transaction said to be of US$10 million.
Shares in Oslo-listed Awilco have been surging since early May on a report saying COSL was eying an acquisition. Awilco had confirmed it was approached by a buyer without identifying it.
The firm had also denied that "a third party has already carried out due diligence." A COSL senior executive refused to comment.
The shares again soared last Friday after the Wall Street Journal said a consortium led by COSL is in advanced talks on acquisition. The stock went from going down 2 percent to rising 4 percent, prompting the Norwegian Stock Exchange to suspend its automatic trading.
Awilco closed at 78 kroner last Friday, which valued the firm at 11.7 billion kroner (US$2.3 billion).
"We believe drilling firms such as Awilco Offshore, Scorpion Offshore and Seadrill in Norway could fit well in COSL's one-stop solution business model by boosting the latter's fleet size to accommodate robust demand growth in offshore China," a CLSA report said last month.
(Shanghai Daily June 24, 2008)
