China seeks North American energy reserves, expertise

SHANGHAI - The Associated Press

A man walks into the Nexen building in Calgary, Alberta, July 23. China may soon get control of a large slice of UK North Sea oil supplying global oil prices. REUTERS photo

Offshore Chinese energy giant CNOOC’s $15 billion offer for Canadian oil and gas producer Nexen Inc. is strategically calibrated to win regulatory approval - unlike its failed 2005 attempt to buy Unocal.

The deal announced on July 23 shows China’s appetite for overseas energy assets remains as strong as ever despite its current economic slowdown. Weaker oil prices and a resolve to capture technologies China needs to unlock its own sizable but hard to extract reserves are powerful incentives for its energy companies to snap up foreign producers.

Back in 2005, protests that the sale of Unocal might jeopardize U.S. national security prompted CNOOC Ltd. to withdraw its $18.5 billion bid. This time, CNOOC is promising to protect jobs and boost investment to head off any protests.