Chinese Communist State Company–China National Offshore Oil Corp.(CNOOC)–Invests In Texas Oil–Videos

Posted on October 13, 2010. Filed under: Blogroll, Communications, Demographics, Economics, Employment, Energy, Foreign Policy, government, government spending, Investments, Law, liberty, Life, Links, media, People, Philosophy, Politics, Resources, Strategy, Technology | Tags: , , , , , , , , , |

Cnooc Ltd. Buys 33% Stake In Chesapeake Energy’s Eagle Ford Shale For $1.08 B


Morning Market Snapshot: October 11th, 2010



CNOOC To Cut Costs, Boost Oil Output This Year – Bloomberg


Davos Annual Meeting 2010 – Redesigning the Global Dimensions of China’s Growth

Should China Be Allowed to Buy Texas Oil?

China’s play for Texas oil is just another act in the US debt drama.

By Peter Navarro

“…Second, with China, there is always the perennial “what’s good for the goose is good for the gander” issue. In fact, China recently began an accelerated strategy to develop shale gas within China and will use this latest deal to acquire technologies related to shale gas development as well as knowledge about best drilling practices and other critical information. Of course, once it acquires this technology and information, the protectionist Chinese government will not allow foreign companies the same kind of access to its own shale gas industry.

Third, in and of itself, this deal may seem fairly innocuous. However, it also represents a “camel’s nose under the tent” probe by the Chinese government for bigger and bolder acquisitions that may not be in the strategic interests of the United States — remember the controversy five years ago when China tried to buy Unocal.

Finally, deals like this play an important part in China’s currency manipulation as China seeks to diversify out of U.S. government bonds and acquire hard assets like oil reserves which represent a better inflation hedge. To be clear here, to maintain the grossly undervalued Chinese yuan’s fixed peg to the dollar, the Chinese government must circulate U.S. dollars back into the U.S. One way to do this is to buy U.S. government bonds, which is how China has acquired almost $2 trillion of U.S. treasuries. But buying hard U.S. assets like oil reserves is now seen in Beijing as a better way for China to manipulate its currency because hard assets are better inflation hedges.

In the final analysis, the best way to look at this deal is as just another monthly payment by America on its mortgage to China. Until China freely values its currency, lowers its Great Walls of Protectionism around its various markets and resources, and plays by the rules of free trade, Chinese companies, whether state-owned enterprises or not, should not be allowed to acquire American companies. …”


China Turns to Texas for Drilling Know-How


“…The deal struck with Chesapeake Energy Corp. is driven by the Chinese state-controlled oil company’s desire to both gain a foothold in a booming U.S. energy market and garner technology that could increase China’s domestic energy supplies and reduce its reliance on coal-fired power plants, industry experts say.

Chesapeake is one of the pioneers in applying new drilling technologies to release oil and gas trapped in tight rock formations called shales.

The deal will likely get a full, 75-day review by the Committee on Foreign Investment in the United States, said legal experts. But CFIUS—the interagency body that vets foreign purchases of U.S. assets for threats to national security—is unlikely to oppose the deal, they added.

The proposed purchase as outlined would help expand energy production in the U.S. and any technology transfer to the Chinese would help them develop their own sources of oil and natural gas, they said.

In 2005, Cnooc withdrew a multi-billion dollar bid for Unocal Corp. amid national security worries in Washington, D.C. But last year, its acquisition of offshore fields in the U.S. Gulf of Mexico was unopposed.

Chesapeake Chief Executive Aubrey McClendon said in an interview that he expects few objections. The investment is evidence Chinese companies are “able to figure out a way to invest in the U.S. in a manner that is acceptable in the business community and acceptable to political leadership,” Mr. McClendon said. …”

China stakes claim to S. Texas oil, gas

By Monica Hatcher – Houston Chronicle


“… State-owned Chinese energy giant CNOOC is buying a multibillion-dollar stake in 600,000 acres of South Texas oil and gas fields, potentially testing the political waters for further expansion into U.S. energy reserves.

With the announcement Monday that it would pay up to $2.2 billion for a one-third stake in Chesapeake Energy assets, CNOOC lays claim to a share of properties that eventually could produce up to half a million barrels a day of oil equivalent.

It also might pick up some American know-how about tapping the hard-to-get deposits trapped in dense shale rock formations, analysts said.

As part of the deal, the largest purchase of an interest in U.S. energy assets by a Chinese company, CNOOC has agreed to pay about $1.1 billion for a chunk of Chesapeake’s assets in the Eagle Ford, a broad oil and gas formation that runs largely from southwest of San Antonio to the Mexican border.

CNOOC also will provide up to $1.1 billion more to cover drilling costs. …”

Background Articles and Videos

Davos Annual Meeting 2010 – What Is the “New Normal” for Global Growth?

CNOOC Invests in Chesapeake Field For $2.16B

News Update: CNOOC, GE Considering Setting Up Private Equity Fund Worth 3 Billion Yuan (CEO,GE)


What’s In The News: July 2, 2010

CNOOC Seeks Stakes In Nigeria Oil Reserves

News Update: Cnooc Ltd. Profit Doubles, Announces Management Reshuffling

Cnooc, General Electric plan PE fund

By Wan Zhihong and Mao Lijun (China Daily)

New venture likely to consider investments in energy projects at home and abroad

“…BEIJING – China National Offshore Oil Corp (Cnooc) and global conglomerate General Electric Co (GE) are considering setting up a 3 billion yuan private equity (PE) fund, a source familiar with the matter said on Thursday.

Both companies will hold identical stakes of 50 percent each in the fund. The fund will be used for investments in several sectors including domestic and global energy projects, the source said on condition of anonymity.

Analysts said the move would boost Cnooc’s asset management and investment capabilities. It also lends credence to the offshore oil explorer’s efforts to develop itself into an integrated energy company.

China’s two leading oil companies, PetroChina and Sinopec, have already got strong financial businesses. Hence it is only natural for Cnooc also to consider a financial sector extension, said Liu Gu, an analyst with Guotai Jun’an Securities in Shenzhen.

Cooperation with GE would help Cnooc improve its risk management capabilities, said Lin Boqiang, a professor at Xiamen University.

“Cnooc will benefit from GE’s professionalism and rich experience in managing assets,” he said.

Analysts said Cnooc would gain from GE’s strong global network and have better access to overseas investment opportunities. …”


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