Santos denies takeover move by CNPC

08 December 2008

Santos Ltd, Australia's third-largest oil company, has denied reports that China National Petroleum Corp (CNPC) is teaming up with some foreign firms to make a bid for it.

"Santos is aware of continued speculation in the media regarding possible third party initiatives regarding Santos, including an article in this morning's South China Morning Post,'' it said in a statement to the stock exchange.

"So far as Santos is aware this is pure speculation,'' the release added.
 
Citing unnamed sources, the South China Morning Post said China National Petroleum Corporation, China's largest integrated oil and gas company, was weighing plans for a joint bid for Santos with a foreign oil company.

"It would probably be a European firm that doesn't have a huge presence in Australia already,'' the Hong Kong paper quoted a source as saying.

While the timing is apt for a bid considering the deep dive of commodity prices and the consequent fall in share values, it is unlikely that commodity firms may take a call on any offer which is seen as below the intrinsic value of companies.

Industry watchers have linked CNPC's name with BP since, they say, BP has significant JVs with oil companies in China.