• 4 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 7 minutes Countries with the most oil and where they're selling it
  • 10 minutes Stack gas analyzers
  • 13 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 5 hours US Military Spends at least $81 Billion Protecting OPEC Persian Gulf Oil Shipping Lanes (16% DoD Budget)
  • 11 hours How many drilling sites are left in the Permian?
  • 7 hours Mueller Report Brings Into Focus Trump's Attempts to Interfere in the Special Counsel Investigation
  • 11 mins End of Sanction Waivers
  • 4 hours "Undeniable" Shale Slowdown?
  • 8 hours Case against Trans Mountain Begins
  • 2 days Overheating the Earth: High Temperatures Shortened Alaska’s Winter Weather
  • 7 hours Trudeau Faces a New Foe as Conservatives Retake Power in Alberta
  • 7 mins Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 4 hours Climate Change Protests
  • 6 hours Gas Flaring
  • 8 hours U.S. Refiners Planning Major Plant Overhauls In Second Quarter
  • 9 hours Oil at $40
  • 7 hours China To Promote Using Wind Energy To Power Heating

Breaking News:

Guaido Takes Strides To Topple Maduro

Alt Text

Oil Bulls Undaunted By OPEC Fears

Fears of OPEC+ abandoning its…

Alt Text

U.S. Doubles Oil Exports In 2018

The United States nearly doubled…

Alt Text

Why Elon Musk Is Wrong About Hydrogen

Electric passenger vehicles are getting…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Trending Discussions

Chinese M&A Wave Could Be Bad News For Investors

Up to $35 billion in Chinese investor dollars in the oil industry have been slated for mergers and acquisitions, but this fact may work against the best interest of the country’s capital holders, according to a new report by Bloomberg.

A majority of the $160 billion in M&A in the oil sector over the past 20 years has proved to be disadvantageous to shareholders in China, analysts at Sanford C. Bernstein & Co. said.

Offshore producer CNOOC has spent $15 billion on just the 2013 Nexen purchase. CEFC China Energy invested in Russian state giant Rosneft at a $9 billion rate earlier this year.

“After a period of inactivity, we expect M&A activity to increase,” Bernstein analysts said in the report. “Unlike previous cycles, M&A will be more disciplined and hopefully more value orientated.”

At a $65 barrel, outbound mergers targeted at Europe and Africa have lost investors $23 billion in value, Bernstein says, which uses purchase price, remaining net-present value and free cash flow.

“Given fears of energy security, the perceived wisdom is that Chinese companies are buying resources to make up for the deficiency in domestic oil and gas reserves,” the analysts said. “As such, many investors see outbound M&A as a form of national service, which is largely wasteful.” Related: The 'Mega' Oil Field That Will Never Boom

West Virginia’s shale gas business got a $83 billion investment from the world’s largest power company, China Energy, earlier this year.

Mergers in the domestic space are popular as well, but do not lead to a similar drain of capital resources. Earlier this year, China approved the merger between its biggest coal producer Shenhua Group Corp, and one of the top five state power companies, China Guodian Corp, in a deal that would create the world’s largest power company by installed capacity and with assets worth $271 billion. That company is now called China Energy.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News