China's push for oil in Gulf of Mexico puts U.S. in awkward spot

[n2doc]

Four years after denying a Chinese bid to buy Unocal, the U.S. may be in too weak an economic position to object. Rebuffing China could also push it into the arms of countries hostile to the U.S.

By David Pierson
October 22, 2009

Reporting from Beijing - A Chinese company's gambit to drill for oil in U.S. territory demonstrates China's determination to lock up the raw materials it needs to sustain its rapid growth, wherever those resources lie.

The state-owned China National Offshore Oil Corp., or CNOOC, reportedly is negotiating the purchase of leases owned by the Norwegian StatoilHydro in U.S. waters in the Gulf of Mexico, the source of about a quarter of U.S. crude oil production.

China's push to enter U.S. turf comes four years after CNOOC's $18.5-billion bid to buy Unocal Corp. was scuttled by Congress on national security grounds. The El Segundo oil firm eventually merged with Chevron Corp. of San Ramon.

Whether CNOOC's second attempt to lock up U.S. petroleum assets will trigger a similar political backlash remains to be seen. The sour U.S. economy and the need for Washington and Beijing to cooperate on potentially larger issues could mute any outcry.

more:
http://www.latimes.com/business/la-fi-china-oil22-2009oct22,0,2776603.story

[Ganja Ninja]

1. and naturally the Bush administration practically gave away the original lease.

Way to go right wingers. Keen choice of president you made.

[pampango]

2. Sounds like China's oil company wants to buy oil leases owned by another foreign company,

the Norwegian company - StatoilHydro.

"The state-owned China National Offshore Oil Corp., or CNOOC, reportedly is negotiating the purchase of leases owned by the Norwegian StatoilHydro in U.S. waters in the Gulf of Mexico, the source of about a quarter of U.S. crude oil production."

"The U.S. could also find it difficult to rebuff China when it has long welcomed other foreign investment in the gulf. In addition to StatoilHydro, foreign oil companies with stakes in deep-water projects there include Spain's Repsol, France's Total, Brazil's Petrobras, British oil giant BP and the Dutch-British multinational Shell."

"The U.S. risks undercutting its foreign policy goals as well. Concern is growing over China's aggressive investment in oil-rich nations with anti-U.S. regimes, including Iran and Sudan. Denying China a shot at drilling in U.S. waters would only encourage Beijing to make deals in volatile regions given that new oil reserves in stable, democratic nations are getting harder to find."

"The Chinese Development Bank lent Brazil's Petrobras $10 billion to help with its $170-billion, five-year plan to increase its crude output. In exchange, Petrobras agreed to give the Chinese 200,000 barrels a day of oil exports. China extended a $4-billion loan to Venezuela to expand various oil projects, according to the Energy Information Administration. Chinese companies are also reportedly eyeing new oil deals in Nigeria and Ghana."