China moves to acquire Canadian energy giant

On Monday, China’s State-Owned Cnooc Bid $15.1 Billion To Buy Canadian Energy Giant Nexen As A Post-Keystone XL Pipeline Move To Replace The U.S. As Canada’s Biggest Energy Investor And Market. “President Obama may not want to exploit the energy buried in Canada’s Alberta oil sands, but China sure does. Think of Monday’s $15.1 billion offer by China’s state-owned Cnooc to buy Canadian energy giant Nexen as a post-Keystone XL Pipeline bid to replace the U.S. as Canada’s biggest energy investor and market.  Nexen offers Cnooc a sweeping North American energy footprint, with assets from heavy oil and shale gas in Alberta to offshore leases in the Gulf of Mexico. Part of the bet is also on Canadian politics, which could block the investment on nationalist grounds but which so far hasn’t been captured by the anticarbon fevers that dominate Washington. “ (Editorial, “China’s Canadian Energy Play,” The Wall Street Journal, 7/24/12)

China’s Deal To Acquire Canadian Nexen “Would Win Significant Resources In Canada, The Gulf Of Mexico, The North Sea And Offshore Western Africa.” “Roughly half of China’s crude-oil imports come from the Middle East, and it is also heavily dependent on crude output from Angola, Venezuela and Russia. Should it meet regulatory concerns in a number of countries and close the Nexen deal, Cnooc would win significant resources in Canada, the Gulf of Mexico, the North Sea and offshore western Africa. The Nexen deal reflects Chinese state-controlled energy companies’ desire to boost reserves immediately. Many of their major domestic initiatives remain years away.” (Brian Speagle and Wayne Ma, “Chinese Oil Companies’ Deal Appetite To Grow,” The Wall Street Journal, 7/24/12)

While Obama Blocked The Keystone XL Pipeline Here, China Continues To Be Aggressive In Acquiring Stable Energy Resources.  “The result could be higher prices industrywide for lucrative producing properties, as sellers hold out for better offers. ‘All the majors are looking to acquire, and if someone is out there being a lot more aggressive than you are, it makes people who are trying to sell hold on for a higher price, even if there’s no chance the Chinese will buy them,’ said Laban Yu, head of oil and gas research at Jefferies Hong Kong Ltd., a securities and investment-banking firm. By overinvesting, he added, ‘China is essentially subsidizing oil for the whole world.’” (Brian Speagle and Wayne Ma, “Chinese Oil Companies’ Deal Appetite To Grow,” The Wall Street Journal, 7/24/12)

OBAMA HAS FAILED TO MAKE AMERICAN ENERGY INDEPENDENCE A SUCCESS OR PRIORITY

“Obama’s Bow To American Greens Was A Direct Snub To Canada, Which Provides Nearly 30 Percent Of U.S. Imports” And Rejecting “The $7 Billion Keystone XL Has No Doubt Concentrated Chinese And Canadian Minds.” “Mr. Obama’s rejection of the $7 billion Keystone XL has no doubt concentrated Chinese and Canadian minds. The pipeline would have moved oil from Canada and North Dakota to refineries on the Gulf Coast, and Mr. Obama’s bow to American greens was a direct snub to Canada, which provides nearly 30% of U.S. imports. Prime Minister Stephen Harper promptly said that Canada needs to diversify its energy markets, perhaps by building a pipeline from Alberta to the West Coast to export to Asia. Energy-hungry China couldn’t be happier. Chinese bids for North American companies haven’t always been welcomed—see the rejection last year of a Chinese consortium’s $38.6 billion hostile bid for Canada’s Potash Corp. But Cnooc executives might figure that Canadian regulators will be more welcoming to this nonhostile bid in the wake of the Keystone fiasco. Canada needs capital to exploit the oil sands and the markets to buy what is produced. Cnooc can help with both.” (Editorial, “China’s Canadian Energy Play,” The Wall Street Journal, 7/24/12)

Instead Of Working Towards American Energy Independence, “President Obama Has Spent Tens Of Billions On Failed Green Energy Schemes While Making Fossil-Fuel Exploration Harder” This Week Even Issuing Veto Threats Against A Bill To Allow Greater Offshore Exploration. “Contrast that to the U.S., where President Obama has spent tens of billions on failed green energy schemes while making fossil-fuel exploration harder. This week the White House issued a veto threat against a House bill that would restore pre-Obama plans to allow greater offshore exploration. Alaska oil production is so low that there are worries about the viability of its pipeline. Shell Oil, which has plowed $4.5 billion into an Arctic investment, has been waiting the entire Obama Presidency for permits. The EPA is also waiting for a second term to impose national regulations on shale fracking.” (Editorial, “China’s Canadian Energy Play,” The Wall Street Journal, 7/24/12)