Sinopec: China Oil's Blind Spot
HEARD ON THE STREET: China Oil's Blind Spot
Last Update: 6/25/2009 6:41:48 AM
By Andrew Peaple and David Winning
A DOW JONES COLUMN
Competing with Chinese oil companies for coveted energy assets, other Asian firms
are finding themselves outbid at every turn.
But they're having success venturing where China won't: the U.S.
Sinopec's $7.2 billion acquisition of Addax, has a familiar ring to it. The hefty
offer made Korea National Oil Corp. the latest loser to deep-pocketed Chinese
buyers. Also on that list is India's Oil & Natural Gas Corp.
The Chinese oil companies are certainly spending more. Including the Addax deal,
they've bought $43.7 billion of overseas assets since 2005. India's oil
companies, by comparison, have spent $8.7 billion, the Japanese $7.1 billion, and
South Korean firms $3.9 billion, according to Dealogic.
Still, there's one area where companies like KNOC have an edge. Chinese companies
have stayed away from U.S. assets ever since Cnooc's attempt to buy Unocal in
2005 became a political punching bag.
Meanwhile, with Korea-U.S. relations on a much easier footing, KNOC and others
are hunting for acquisition prospects stateside to achieve its target of
producing 300,000 barrels of oil per day by 2012.
Indeed, KNOC's two largest overseas acquisitions were in the U.S. This year it
paid $900 million for Offshore International Group, and $1 billion last year for
an oil field in the Gulf of Mexico. Five of the 10 largest deals done by Japanese
oil companies in the last four years have been in the U.S.
Without China in the game there, they certainly stand more of a chance.
(Andrew Peaple, is a Heard on the Street columnist. Currently based in Beijing he
can be also covered the U.K. economy and financial services, and is a
U.K.-qualified chartered accountant. He can be reached on +86-10-6588-5848, or by
email on andrew.peaple@dowjones.com)
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(END) Dow Jones Newswires
June 25, 2009 06:41 ET (10:41 GMT)
