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Obama lets Chinese own U.S. energy resources
Posted By Jerome R. Corsi On 01/21/2013 @ 8:30 pm In Money,Politics,U.S.,World | No Comments
NEW YORK – The Obama administration is quietly allowing China to acquire major ownership interests in oil and natural gas resources across the U.S.
The decision to allow China to compete for U.S. oil and natural gas resources appears to stem from a need to keep Beijing economically interested in lending to the U.S. The Obama administration has run $1-trillion-plus annual federal budget deficits since taking office that likely will continue in the second term.
Allowing China to have equity interests in U.S. energy production is a reversal of the Bush administration’s policy. In 2005, the Bush administration blocked China on grounds of national security from an $18.4 billion deal to purchase California-based Unocal Corp.
As WND reported Monday, Beijing has been developing a proposal in which real estate on American soil owned by China would be set up as “development zones” to establish Chinese-owned businesses and bring in its citizens to the U.S. to work.
China leased first oil rights in Texas
China’s first major move into the U.S. oil and natural gas market can be traced to October 2009, when the state-owned Chinese energy giant CNOOC bought a multi-million dollar stake in 600,000 acres of South Texas oil and gas fields.
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Reporting the story, Monica Hatcher of the Houston Chronicle suggested China was “testing the political waters for further energy expansion into U.S. energy reserves.”
China’s purchase of U.S. oil and natural gas rights will strike millions of Americans as paradoxical, since the U.S. continues to be a net importer of approximately 60 percent of the oil consumed in the U.S.
The Chronicle reported China paid $2.2 billion for a one-third stake in Chesapeake Energy assets, with CNOCC laying a claim to a share of energy resources in South Texas that could produce up to half a million barrels of oil per day.
The Houston paper reported that as part of the deal, CNOCC agreed to pay approximately $1.1 billion for a share of Chesapeake’s assets in the Eagle Ford, a broad oil and gas formation that runs southwest of San Antonio to the Mexican border.
The Chronicle also reported that the deal with China could create as many as 20,000 jobs in the U.S. and provide the capital Chesapeake needs to increase its rig count in South Texas from 10 to 42 by the end of 2012.
China’s oil interests
Along with CNOOC, which is 100-percent owned by the communist Chinese government, Sinopec Group also is purchasing energy interests in the U.S.
Sinopec Group is the largest shareholder of Sinopac Corporation, a state-owned investment company incorporated in 1998 largely to acquire and operate oil and natural gas interests worldwide.
The Wall Street Journal recently compileda state-by-state list of the $17 billion in oil and natural gas equity interests CNOOC and Sinopec have acquired in the U.S. and Canada since 2010.
The Wall Street Journal reported China’s strategy – implemented since 2010 by Fu Chengyu, who has served as chairman of both CNOOC and Sniopec – is to “seek minority stakes, play a passive role, and, in a nod to U.S. regulators, keep Chinese personnel at arm’s length from advanced U.S. technology.”
China moving into Gulf of Mexico
After a difficult political struggle, China received permission last month from the Canadian government to make its largest overseas acquisition of oil and natural gas interests outside China, acquiring Canadian energy producer Nexen Inc. for $15.5 billion. In the process, China acquired Nexen oil and natural gas operations in the Gulf of Mexico in U.S. waters.
Although the deal still requires approval from CIFUS, the U.S. Committee on Foreign Investment, the acquisition of Nexen’s high-tech ultra-deepwater drilling resources in the Gulf of Mexico was a major reason China sought to acquire the company. CNOOC, a company that derives nearly all its domestic capacity from shallow waters, has announced a goal of producing 1 million barrels of oil per day from ultra-deepwater oil and natural gas facilities by 2020, more than doubling current capacity.
In 2010, China passed the U.S. to become the world’s largest energy consumer, according to the International Energy Agency. China consumed 2.252 billion tons of oil equivalent in 2009, approximately 4 percent more than the U.S.
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