The country is snapping up oil fields from Africa to South America to the Middle East. Soon it may be able to rival the Western giants.
NEW YORK (CNNMoney.com) — China is on an oil buying binge.
Over the past few months, the Chinese government — or its big government-controlled oil firms — have closed or floated a slew of deals in countries all over the world. These deals have expanded the nation’s oil reach and may one day position the nation to match the skills of western oil firms.
The deals include a $10 billion loan the Chinese government extended to Russia’s Rosneft in exchange for a guaranteed cut of that company’s production. The Chinese have also gotten in tight with Brazil’s Petrobras, arranging a similar deal with the firm that is developing a huge new offshore field – one of the biggest new discoveries in decades.
But it doesn’t end with loans. Last week the Wall Street Journal reported that China National Petroleum Corporation is interested in buying all or a part of Argentina’s YPF for $14.5 billion, although a deal is far from certain.
In Africa, CNOOC and Sinopec are buying a $1.3 billion stake in offshore Angolan development rights from American oil firm Marathon. Angola has recently overtaken Nigeria as Africa’s biggest oil producer, and is one of Exxon Mobil’s (XOM, Fortune 500) favorite countries to invest in.
And rumors are swirling that the China National Petroleum Corporation will take the majority stake in Iraq’s Rumaila oilfield from BP (BP). Rumaila produces over 1 million barrels a day, and is Iraq’s biggest oil field.
It’s clear what the Chinese are doing.
“They are stilting on a huge pile of cash and they’re using this as a buying opportunity,” said Greg Priddy, a global energy analyst at the Eurasia group, a political risk consultancy.
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