By Washington correspondent Jin Yan; and staff reporters Shi Zhiliang, Wang Zhen, Li Yi, Hu Wen, Yang Yue, and Li Yan

For three weeks, two conflicting sentiments-shock and calmness-pervaded China National Offshore Oil Corp. Ltd. (CNOOC) headquarters in Beijing. Not long ago, CNOOC, China's No. 3 oil producer, made what will likely be the country's biggest overseas acquisition.

CNOOC announced July 23 a deal to acquire all shares of Canada-based Nexen Inc. (Nexen) for US$ 15.1 billion. The company will pay US$ 27.5 per share for common shares and CA$ 26 per share for preferred shares, representing a 61 percent premium over the price Nexen's stock fetched the previous trading day. CNOOC will also take over Nexen's US$ 4.3 billion debt.

The deal sent a shockwave throughout the industry. A week after the announcement, a mid-level manager at CNOOC told Caijing, "I was shocked when I first heard the news. I had no clue that this was going to happen. But on second thought, it does make sense."

The sheer size of the transaction is astonishing. In terms of volume, the deal is third only to Aluminum Corporation of China (CHINALCO)'s failed attempt to invest US$ 19.5 billion in Rio Tinto in 2009 and CNOOC's aborted US$ 18.5 bid for America-based oil company Unocal Corp. in 2005.

The transaction makes sense considering CNOOC's size and ambition. The company's profit exceeded 100 billion yuan in 2011, which is higher than the sales revenue it earned seven years ago when it attempted to acquire Unocal. Though the two previous transactions failed, CNOOC's acquisition of Nexen is expected to be approved. If completed, the US$ 15.1 billion deal will likely become China's biggest overseas acquisition in history.

CNOOC's current leader Wang Yilin joined the company over a year ago. At 56, Wang is younger than his counterparts at the other two oil giants in China. Fu Chengyu, Wang's predecessor who helmed CNOOC for eight years, was known as the "most internationalized", "most entrepreneurial" state-owned enterprise (SOE) leader in China. Fu was committed to shaping CNOOC into a first rank International Oil Company (IOC) during his tenure.

The deal is waiting to be approved by stockholders at Nexen's shareholder meeting which will be held at the end of the third quarter. In the meantime, it must also be vetted by regulatory authorities in Canada, the United States, the United Kingdom, and China. CNOOC predicts the deal will close in the fourth quarter this year.

However, an insider trading scandal cast a shadow on the acquisition. Four days after the acquisition announcement, the United States' Security and Exchange Commission (SEC) filed a complaint in court against Hong Kong based investors for insider trading.

Zhang Zhirong, chairman of Rongsheng Heavy Industries Group, along with other investors are alleged to have made US$ 13 million through inside knowledge of CNOOC's proposed buyout of Nexen. Zhang entered a strategic cooperation agreement with CNOOC in 2012.

Experts predict the scandal will tarnish CNOOC's reputation, but the deal, which will be examined by the Committee on Foreign Investment in the United States, may still go ahead, unlike CNOOC's aborted attempt to acquire America-based Unocal Corp. in 2005.

If completed, the Nexen deal would help CNOOC further expand its global presence, make up for its weakness in unconventional oil&gas, and consolidate its strength in off-shore oil extraction.

Robin Mills, an expert in petroleum geology and petroleum economics, told Caijing that after the deal, CNOOC will become a major player in Canada and an important player in North America. "The company may become an authentic IOC through this deal," added Mills.

However, uncertainties in global oil prices and increasing environmental concerns have cast doubt on oil-sands, a core business of Nexen. Besides, CNOOC may face challenges in integrating staff and bridging cultural differences.