Husky and Cnooc Resolve Liwan Gas Dispute by Lowering Prices
- Price reduction far less than feared by investors: FirstEnergy
- Outcome seen by RBC as positive for foreign operators in China
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The end of a dispute over prices from an offshore Chinese energy project resolves an overhang on shares of Husky Energy Inc. and prospects for natural gas development in the Asian nation.
Husky, the Canadian producer controlled by Hong Kong billionaire Li Ka-Shing, on Tuesday announced an agreement that will lower prices paid for gas output from the deepwater Liwan project. That settles a discord with China’s state-owned Cnooc Ltd. that took investors by surprise in April, when Husky said Cnooc was seeking to pay lower prices than stipulated by an existing contract. Husky also said Tuesday that the companies will develop Liuhua 29-1, a field at Liwan, adding to the project’s growth.