<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by DennisAJC:
They know where the oil is. </div></BLOCKQUOTE>
China buys Canadian oil company for $5 billion
CTV.ca News Staff
China's biggest state-owned oil company has plunked down more than $5 billion to buy Calgary-based oil company PetroKazakhstan.
CNPC International made the purchase on Monday. That company is a wholly-owned subsidiary of China National Petroleum Corp., one of the world's 10 biggest oil companies.
"I understand that so far this year, it would be the second-largest transaction of oil and gas in the world," said Bernard F. Isautier, PetroKazakhstan's CEO.
CNPCI out-bid an Indian company, ONGC-Mittal. That firm had offered $4.33 billion for PetroKazakhstan.
While headquartered in Calgary, PetroKazakhstan operates solely in the Central Asian country of Kazakhstan, which is to the south of Russia and north of places like Uzbekistan and Kyrgyzstan.
Experts predict Kazakhstan will become one of the world's top oil producers over the next two decades. According to the CIA World Factbook, the estimated current proved reserves are 26 billion barrels. Production was estimated in 2004 to be 1.2 million barrels per day.
PetroKazakhstan is the third-largest oil producer in that country.
Purchasing PetroKazakhstan is part of a pattern by China.
As the economy of world's most populous country continues to expand, it is engaged in a relentless search for resources to fuel the boom.
That puts it in competition with other oil-hungry nations like India and the United States.
Some oil producers are starting to seek China's business. For example, Venezuela, which has strained relations with the United States, has just had its state oil company open an office in China.
"China's a big customer, and they're hungry for oil," said University of Calgary business professor Bob Schulz.
He characterized the PetroKazakhstan purchase by saying, "this is just the start."
For example, experts say the oil reserves locked in Alberta's oil sands are the world's second-largest in size, with only Saudi Arabia's proven reserves topping them.
"China's interested in buying natural resources to help their economy grow," Schulz said. "The question is what is Canada going to allow or permit China to buy in Canada."
He added: "It would be a good time to start that question now, before something happens."
The Council of Canadians agrees with that view.
"Every decision in regards to oil and gas is being made piece by, and it's basically selling off what we have righ now under control -- which we cannot get back," said Guy Caron, a spokesman for the group.
There are foreign ownership restrictions in the telecom and airline industries, but virtually none for the oil and gas business. However, industry experts say takeovers can be made subject to a government review.
In the United States, some lawmakers saw a Chinese bid for the oil company Unocal as a national security threat.
CNOOC, the Chinese company making the bid, withdrew it earlier this month after what it called "unprecedented political opposition."
If national control is the issue, one transaction that largely went below the radar was the purchase of Terasen Inc. (formerly B.C. Gas), which has holdings in the oil sands, by a Texas-based company.
Very little concern was expressed about that purchase.
Although China currently holds only minor stakes in the Alberta oil sands, the belief is they want more.
The United States also has its eye on the oil sands as a future source of oil.
U.S. Vice President Dick Cheney is expected to visit Alberta next month. A tour of the oil sands is believed to be on his agenda.
With a report from CTV's Sarah Galashan
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/112...20136063/?hub=Canada