Axis Energy Corp (AXGC)

[Win4me]

Dow article

LONDON (Dow Jones)--The Libyan government is looking to buy Verenex Energy Inc. (VNX.T), a small Canadian oil company with Libya-focused operations, for around 10% less than what the Chinese government has offered to pay, a senior official said Tuesday.

The move, representing a shift from what the Libyan government said officially earlier this year, comes after months of foot-dragging from the Libyans over whether to buy Verenex itself or to approve a roughly US$460 million buyout offer from state-run China National Petroleum Corp. for the Calgary-based company.

In terms of volumes discovered, Verenex has been the most successful oil explorer over the past four years in Libya, an OPEC state with the world's eight largest proven oil reserves.

But the company has been caught in a struggle between the Libyan and Chinese governments that has become something of a test case for how Libya respects deals with foreign companies under its new oil contract regime put in place in over the past five years.

The Libyan official said the General People's Committee, which acts as an executive council made up of several senior Libyan officials, is looking for the North African state to buy Verenex for around 9 Canadian dollars

(US$8.34)

a share.

Libya's national oil company in March said the state would block the Chinese deal but pay the same price the Chinese were offering of C$10 a share.

"We think this reduced price would be fair value," the senior Libyan official told the Wall Street Journal at the time.

Verenex said in a statement Tuesday the General People's Committee is seeking to "negotiate a reduced purchase price," a move Verenex Chief Executive Jim McFarland recently called unacceptable.

It also said the CNPC hasn't yet terminated its proposed offer for Verenex, which was due to expire Aug. 24, and that talks continued between Verenex and the Libyan government.

the senior "un-named" official is interesting.