Li Ka-shing's CK Hutchison deepens oil bet with Cenovus's C$5.7bn Athabasca deal
CK Hutchison, controlled by Hong Kong's richest man Li Ka-shing, is doubling down on oil via its stake in Cenovus Energy, which agreed to buy Athabasca Oil for C$5.7 billion (US$4 billion). The deal follows Cenovus's C$8.6 billion acquisition of MEG Energy, underscoring the group's bet on fossil fue
CK Hutchison Holdings, the flagship of Hong Kong's richest man Li Ka-shing, is deepening its exposure to the oil industry through Canadian producer Cenovus Energy, in which the group and a Li family trust jointly own roughly 29 per cent. Cenovus agreed earlier this month to buy Canadian peer Athabasca Oil for C$5.7 billion (US$4 billion), according to Reuters, following its C$8.6 billion acquisition of oil sands producer MEG Energy completed less than a year earlier.
The deals come as CK Hutchison's first-half profit, primarily driven by asset sales, received a boost from its Cenovus holding, according to the group's interim report. The U.S.-Israel war on Iran disrupted global energy supplies and increased demand for oil produced outside the Middle East.
"In the world of heightened geopolitical risk, it's wiser to not put all your eggs in one basket," said Tommy Ong, managing director of financial advisory firm T.O. & Associates Consultancy, according to the South China Morning Post. He said Li's group was seeking to maintain a balance between new- and old-economy businesses. Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators, said the Athabasca acquisition would "create synergies" in Canada's oil industry, where the Li family has operated for decades.
CK Hutchison and a family trust invested in Husky Energy in the late 1980s and owned nearly 70 per cent of the company when it merged with Cenovus in 2021. Meanwhile, major asset sales have given the group substantial cash reserves. Earlier this year, a CK Hutchison subsidiary and its associated companies sold British electricity distributor U.K. Power Networks to a French buyer for 10.5 billion British pounds (US$13.9 billion). The group's cash and equivalents reached HK$179 billion (US$22.8 billion) at the end of June, up 25 per cent from the end of last year, excluding proceeds from the VodafoneThree sale.
At CK Hutchison's annual general meeting in May, chairman Victor Li Tzar-kuoi, Li's elder son, reaffirmed the group's cautious approach. "Cash is king," Victor said, adding that quality, stability and return continued to guide new investment decisions, according to AASTOCKS Financial News.
The group's continued commitment to fossil fuels contrasts with broader global investment trends. The International Energy Agency forecasts US$2.2 trillion in clean-energy investment this year, nearly twice the US$1.2 trillion expected to flow into fossil fuels. Leading global investors are also increasing their exposure to AI, with Berkshire Hathaway recently raising its stake in Google parent Alphabet to approximately US$36 billion.
Ong, however, said energy remained "the main determinant" of success even in rapidly growing technology sectors such as AI. The CK group is developing a broad portfolio of energy businesses around the world to pursue different opportunities, he added. "Many of the group's investments have always leaned towards traditional infrastructure projects with stable cash flow," said Tang. "Although the oil industry will gradually feel the impact of clean energy in the long run, it can still bring very stable income."
Li's investment decisions attract close scrutiny, with experts pointing to his ability to time asset sales, including Hutchison Whampoa's exit from British mobile operator Orange near the peak of the dot-com bubble and CK Asset's disposal of a landmark Hong Kong office tower more than a year before the city's commercial property market peaked. Major asset sales have given the group substantial cash reserves: a CK Hutchison subsidiary and its associated companies sold British electricity distributor U.K. Power Networks to a French buyer for 10.5 billion British pounds (US$13.9 billion) earlier this year. The group's cash and equivalents reached HKD179 billion (US$22.8 billion) at the end of June, up 25 per cent from the end of last year, excluding proceeds from the VodafoneThree sale.
At CK Hutchison's annual general meeting in May, chairman Victor Li Tzar-kuoi, Li's elder son, reaffirmed the group's cautious approach. "Cash is king," Victor said, adding that quality, stability and return continued to guide new investment decisions, according to AASTOCKS Financial News.
The group's continued commitment to fossil fuels contrasts with broader global investment trends. The International Energy Agency forecasts US$2.2 trillion in clean-energy investment this year, nearly twice the US$1.2 trillion expected to flow into fossil fuels. Leading global investors are also increasing their exposure to AI, with Berkshire Hathaway recently raising its stake in Google parent Alphabet to approximately US$36 billion.
Ong, however, said energy remained "the main determinant" of success even in rapidly growing technology sectors such as AI. The CK group is developing a broad portfolio of energy businesses around the world to pursue different opportunities, he added. "Many of the group's investments have always leaned towards traditional infrastructure projects with stable cash flow," said Tang. "Although the oil industry will gradually feel the impact of clean energy in the long run, it can still bring very stable income."
Li's net worth stood at US$48.4 billion at the time of publishing, making him the richest man in Hong Kong and the 38th wealthiest in the world, according to Forbes.
