ACCORDING to UK Trade and Investment (UKTI), Friday will be China Business Day. It seems the dragon is too cash-rich to wait, as CNOOC and Sinopec moved on Nexen and Talisman yesterday.
China has bought a number of North American energy assets in recent years, bouncing back after the US Congress spiked CNOOC’s $18.5bn bid for Unocal in 2005. CNOOC took a $1bn stake in Texan shale deposits in 2010, adding further US stakes for $570m in 2011, and bought the bankrupt Opti Canada for another $2bn in 2011. Today, the Middle Kingdom’s resources empire reaches far beyond Africa and South America, although in Canada and the US it is often buying expertise as much as access to oil. But the UK is unused to finding China in control of oil companies so close to home. Talisman and Nexen are Canadian, but own a third of current North Sea production.
It’s food for thought as UKTI parades British business experts for the Chinese delegation on Friday. Should we see it as a dog and pony show for the nation that will soon be shopping for even more European assets, or is North Sea operator licence renewal a bargaining chip for reform? That’s a real test of who holds the power.
Marc Sidwell is City A.M.’s managing editor