Cnooc set to control North Sea's Buzzard field

Cnooc has agreed to buy the Canadian oil producer Nexen for $15.1bn (£9.7bn), in a deal that would make the Chinese oil giant the operator of Buzzard, the North Sea's largest field, and give it a key role in setting the benchmark Brent oil price.

The state-owned oil producer, which was knocked back when it tried to buy the US oil group Unocal for $18.5bn in 2005, hopes to sell the deal to shareholders and the Canadian government by offering a hefty 61 per cent premium to Nexen's Friday stock price, pledging to retain all employees and promising to make Canada its home base for its Western hemisphere operations.

Canada can block any foreign investments worth more than C$330m (£209m) if it thinks a deal is not in the country's interests, as it did with BHP Billiton's bid for Potash Corp.

Nexen has oil sand and shale gas operations in Canada but most of its interests are in the Gulf of Mexico, off West Africa and in the North Sea.