The price is an 18.7 percent premium over Awilco's July 4 closing price and 42 percent above where it traded before May 30, when Awilco said a third party had expressed an interest.
Awilco shares jumped 16.6 percent to a record high 83.50 crowns, but eased back to 82.10 crowns by 1129 GMT. China Oilfield shares were suspended.
Analysts said that Awilco traded below the bid price merely because of the cost of holding the stock until the deal is cleared in a few months.
Buying Awilco expands China Oilfield's overseas operations, which accounted for just 18 percent of the state-run company's revenue last year. China Oilfield's sales rose 42 percent last year to 9.01 billion yuan ($1.3 billion).
Awilco brought in $203.5 million in revenues last year.
"China Oilfield has $1 billion cash in hand. Its biggest problem has been there is no acquisition targets," said BOCI analyst Lawrence Lau. "Awilco has new rigs coming on stream over the next two years, which will benefit China Oilfield."
The deal allows China Oilfield to bring the number of drilling rigs it owns to 22 from 15, with operations in Europe and Asia. It also gives it access to international management expertise and technology.
"Our aim is to become an international oilfield services company with strong competence in global markets by 2010. That cannot be achieved just by organic growth," China Oilfield CFO Zhong Hua said at a press conference on Monday, adding that the company would continue to pursue more acquisitions.
Zhong said the Awilco deal would help China Oilfield enter the high-end North Sea drilling market and further consolidate its position in Southeast Asia.
"The Chinese are willing to pay a premium because this will give them a platform for international expansion," said Fonsfinans analyst Kjetil Bakken. "I don't expect any higher offer," he said, adding it was a good deal for Awilco owners.
China's Outbound Express
Cross-border acquisitions by China have more than quadrupled year to date to $41.1 billion worth of announced deals, according to Thomson Reuters, fuelled by China's hunger for natural resources needed to fuel the country's economic boom.
The offshore services sector has been lifted by record oil prices, pumping up demand and more than compensating for rising labour and equipment costs.
The acquisition marks China Oilfield's first successful overseas purchase after it failed to seal a small deal for Russian oil services firm STU from TNK-BP.
Politics has been an obstacle for Chinese oil sector acquisitions abroad.
China's thirst for foreign oil companies was underscored by listed CNOOC's $18.5 billion cash bid for California-based producer Unocal in 2005. That deal failed amid political backlash from the United States.
"Compared with U.S. firms, European companies have less political obstacles for Chinese companies to make acquisitions," BOCI's Lau said. "I wouldn't expect it to be a problem for the competition authorities," said Oslo-based analyst Bakken.
China Oilfield has said it views Russia, the Middle East and the Gulf of Mexico as strategic markets it needs to explore. It already maintains a presence in Southeast Asia.
Awilco Offshore has a fleet of five modern jack-up and two accommodation rigs. It also has six rigs under construction, including three semi-submersible units, all due for delivery this year or next, and options for two more new rigs.
Speculation that a deal between the two was in the works heated up a few weeks ago, driving up Awilco's share price.
Lehman Brothers, JPMorgan and China International Capital Corp (CICC) advised China Oilfield, while Awilco was advised by Fearnley Fonds and Pareto Securities.