Regal Group International: CNOOC, China’s top offshore oil producer signs $1.1 bln U.S. deal

Oct. 11, 2010 - PRLog -- China National Offshore Oil Corporation, one of China’s largest state run oil companies saw its shares hit a three-year high after news broke that it had agreed to buy a one third share of Chesapeake Energy Corp’s oil and gas assets in a south Texas shale deposit for $1.1 billion. Regal Group International was told that the deal is the biggest Chinese purchase of U.S. energy assets ever.

Industry analysts say the deal could be the start of string of outbound acquisitions as the Chinese firm attempts to meet its aggressive production growth targets to feed the country’s rapidly-expanding economy.

"We expect them to expand their footprint in the Canadian oil-sands and also in Brazil's deepwater. That's the last frontier where you can extract big oil volumes," an analyst specializing in Asian energy told Regal Group International sources said Gordon Kwan, adding that Nigeria and Angola may also come under the firm’s scrutiny.

The deal comes five years after political pressure from the U.S. caused CNOOC’s bid to buy the American oil giant Unocal to collapse forcing the Chinese firm to adopt a strategy of purchasing assets and smaller stakes overseas instead of attempting all-out takeovers in its drive to secure sufficient energy to fuel China’s economic growth.

Earlier in the year, Regal Group International has learned, CNOOC announced it intended spending $3.1 billion on a joint venture with Bridas Energy o f Argentina, while another Chinese state run oil giant, Sinopec, in September acquired a 40 percent stake in the Brazilian unit of the Spanish oil producer Repsol for $7.1 billion.

Chesapeake Energy, the largest independent U.S. oil producer said that with CNOOC’s investment they planned to quadruple the number of oil rigs operating on the Eagle Ford Shale project from 10 to 40 by the end of 2012 and increase production up to as much as 500,000 barrels of oil equivalent per day within 10 years.

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