CHINA PAYING BILLIONS FOR OIL DEALS IN THE AMERICAS
Aruba, May 31, 2012 - Eager to feed its growing energy appetite, China's worldwide buying binge for oil and other energy assets is spreading to North and South America. Yet most analysts say China's newfound interest in American energy may actually be good for U.S. consumers, as it will likely increase oil and gas supplies worldwide and possibly lower prices.
Big deals: Earlier this month, reports said PetroChina (PTR) is close to buying an old refinery on Aruba owned by American refining giant Valero (VLO, Fortune 500).China is also said to be interested in building a pipeline to carry 300,000 barrels a day of Colombian oil to the Pacific Coast, according to a recent Eurasia Group note. These deals come on the heels of some other major energy acquisitions.
They include CNOOC (CEO)'s purchase of a $2 billion stake in Chesapeake's Texas oil fields in 2010 as well as CNOOC's $2 billion purchase of Canadian oil sands operator OPTI Canada in 2011. Also in 2011, China National Petroleum Corp. paid over $5 billion for a joint venture in Canadian shale gas properties held by Encana (ECA), and Sinopec (SHI) put down $7 billion for a share in Brazil's deepwater oil assets.
An insatiable appetite: The acquisitions are being driven by a basic need for energy.
China currently consumes about 10 million barrels of oil a day -- roughly half of what the United States uses. Like the United States, China imports about half the oil it needs.But unlike the United States, where oil demand is flat or declining, demand in China is expected to jump 50% by 2020.
"They have to get as much as they can from where ever they can," said David Fridley, a staff scientist at the China Energy Group at Lawrence Berkeley National Laboratory. "Going to the Americas gives them a legal and political regime that ensures stability."
Read more/ Source: http://money.cnn.com/2012/05/29/investing/china-oil-energy/index.htm?cnn=yes&hpt=ibu_c2