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Chinese energy company buys US oil assets
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One of exploratory sites that CNOOC has purchased stakes in Photo: AFP
Back in 2005 the state-owned, Chinese energy company CNOOC attempted to purchase the US energy corporation Unocal for $18.5 billion. The purchase fell apart as the political backlash over a communist nation buying-up a key US asset was more than Capitol Hill could bear.
Well, the Chinese haven't given-up and announced today that they have successfully purchased limited stakes in four exploitation licenses for deep-water blocks bought in 2007 and 2008 by the Norwegian oil company Statoil.
Statoil, which is itself a 67% state-owned company, declined to reveal the size of the transaction. The current thought is that as oil exploration declines due to the global credit crunch, Chinese investment will be less likely to be opposed. CNOOC will now control 20% of the Tucker prospect and have a 10% stake on the licenses of the Krakatoa, Cobra and Logan blocks, while Statoil will remain the operator of all four blocks.
One must ask themselves the question of whether such Chinese investment is a good or bad thing. Americans have been taught for decades to fear and hate the communists, yet now our government and business leaders openly embrace the communist nation of China.
Should there not be real caution in proceeding to allow Chinese investment in the US's strategic and key assets? Though US-Chinese relations have progressed greatly over the past couple of decades, has it really reached the point that the US should trust China with such control? This debate could and most likely will rage from both sides.
Perhaps the real power in the US-Chinese relationship is "soft-power." That is cultural exports from the US to China that, in all reality, have certainly aided in bringing about the amazing changes that have been seen in China. One may easily argue that China has become more capitalist than even the US at this point, and thus may easily be trusted with controlling US energy assets.
Let's not forget the fact that as of this morning, the Walt Disney corporation announced that an agreement has been reached with the Beijing government that will allow the construction of a new Disney World in Shanghai. Such exports from the US to China must certainly be a sign of the great relationship between the two nations, right?
Maybe, but with the US in over $4-trillion of debt to China, one must certainly remain cautious to what extent a nation such as China may have over the US as a whole. After all, we must not forget the long ago adage that the communists would take over the US without ever firing a shot. Could this case be the beginnings of the fear coming to fruition? Probably not, but let's keep it in mind, just to be safe.
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