• 4 minutes Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 9 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 17 minutes Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 8 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 11 mins Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 36 mins Could Venezuela become a net oil importer?
  • 24 hours Corruption On The Top: Netanyahu's Wife Charged With Misuse of Public Funds for Meals
  • 10 hours Why is permian oil "locked in" when refineries abound?
  • 3 hours Saudi Arabia turns to solar
  • 8 mins Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 hours Teapots Cut U.S. Oil Shipments
  • 12 hours Oil prices going down
  • 25 mins China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 17 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 13 hours Hot line, Macron: Phone Calls With Trump Are Like Sausages Best Not To Know What Is Inside
  • 1 day U.S. Withdraws From U.N. Human Rights Council
  • 2 hours EVs Could Help Coal Demand
  • 23 hours EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 13 hours Putin Says 'Fierce' U.S. Politics Hindering Summit With Trump
Alt Text

The Oil Giant That Saw Its Cash Reserves Plunge 90%

India’s top oil exporter has…

Alt Text

Will Iran Pursue Relations With North Korea?

Some foreign policy analysts criticized…

Alt Text

Russia Boosts Oil Production Before OPEC Meeting

Russia pumped almost 11.1 million…

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

offshore rig

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:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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