China’s Footprint in U.S. Oil

[Richard]

Can you blame China for wanting to gain an energy foothold in America...or the two U.S. companies seemingly in bed with the Chinese?

After all, it's just business...right?

And so it goes...

Richard

China’s Footprint in U.S. Oil: A State-by-State List
WSJ

China is gathering oil and gas assets across the U.S., The Wall Street Journal reports today. State-run giants Cnooc and Sinopec are scooping up minority stakes and signing joint-ventures, to the tune of $17 billion in U.S. and Canadian deals since 2010, to feed the energy thirsty nation.

Here’s a list of the assets, by state, that China’s energy giants have bought:

Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.

Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.

Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.

Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.

Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.

Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.

Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.

Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.

[Dozer523]

They say, "you own only those things you can carry at a dead run." If we had an issue that was escalating I'm sure the Americans working there would remember where they were from, in a pinch the US Government can always seize the assets. We can be so legal sometimes.

[rubberneck]

I don't see the issue here. They don't have a controlling interest in any of these deals. If anything it seems like a fairly sound investment on the part of Chinese companies.

[Richard]

Originally Posted by rubberneck

I don't see the issue here.

My only concern is industrial espionage - a PRC staple.

Richard

[Stargazer]

Thanks for the post Richard.

I wouldn't have as much of a problem with it, if U.S. owned (or foreign owned) companies had an equal opportunity to invest in China. That is not the case. Although one-third is not a controlling share, it's a healthy portion. Not everything that is good for business, is good for the long-term health of U.S. resources/economy. There is a discord in these decisions, between those who profit v. pay...

Due to various government regulations, opportunities for foreign investment are uneven across China's commercial landscape. Though companies in many sectors can establish wholly foreign-owned enterprises (WFOEs)--in fact, 77 percent of foreign direct investment in China last year was in WFOEs--others are limited to joint ventures and minority stakes. Some companies face licensing criteria that effectively exclude them from the market altogether. Notable industries affected by investment restrictions are in key sectors such as agriculture, automobiles, chemicals, energy, express delivery, insurance, securities, and telecommunications.

https://www.uschina.org/info/members...trictions.html

[rubberneck]

Originally Posted by Richard

My only concern is industrial espionage - a PRC staple.

Richard

They used to steal it outright now they're paying for access to the info. the reality is that the proprietary information is generally inaccessible to investors so they'll still have to steal it if they want it.

[mark46th]

No worries! Obama is going to have us in solar/electric/wind/alternatively powered vehicles in a couple of years, the oil companies will go bankrupt because petroleum fueled vehicles will be so pre-2009ish the Chinese will lose their investment and everything will be hunky-fxxking-dory!

[Dad]

My understanding is they are constructing a plant to create LNG in the Eagle Ford Field--I think around Halletsville. There will then be a pipeline directly to the Port of Houston. The Chinese will get 40% of the LNG. At first glance irritated me but on further thought seems like a good idea. We are selling them natural gas to help the trade deficit (we got lots of natural gas) and secondly, could be a pretty effective political tool--like the Russians hold over Europe. I, like Richard do worry about technology theft. But too often they don't have to steal it--there are always greedy assholes ready to sell it. Remember Johnny Chung?