The latest buyout activities as reported by the Wall Street Journal (all bold emphasis mine)
``China National Petroleum Corp. and Cnooc Ltd. have proposed paying at least $17 billion for all of Repsol YPF SA's stake in YPF, its Argentine unit, two people close to the talks said.
``The potential deal, which could be the biggest overseas investment by China, highlights the country's growing thirst for energy resources globally and its willingness to offer big money for access. It also underlines the ambition of CNPC to build its presence in South America and elsewhere.
``A deal would be another example of how Chinese companies are now working together to buy foreign energy assets after years of working alone.
``But the potential acquisition faces significant hurdles. A deal could be politically sensitive in Argentina, where YPF is the country's leader in both upstream operations -- the exploration for and production of oil -- and downstream operations involving oil refining and marketing...
``China's resource majors have snapped up foreign oil and other assets recently, as the country seeks to lock in energy supplies.
``China Petrochemical Corp., the Chinese state-owned oil company known as Sinopec, in June acquired Switzerland-based oil explorer Addax Petroleum Corp. for $7.2 billion. In April, CNPC purchased Kazakh oil producer MangistauMunaiGas jointly with Kazakhstan's state-owned KazMunaiGas for $3.3 billion.
``China's state energy companies are also showing more teamwork in chasing foreign deals than previously. This year Sinopec and Cnooc have together struck deals for oil and natural-gas assets in Angola and the Caribbean. In July they agreed to buy jointly a 20% stake held by U.S. oil producer Marathon Oil Corp. in an oil block off Angola for $1.3 billion.
``Chinese oil companies have also signed oil-for-loans agreements with Russia and Brazil.
``But not all of China's efforts have been successful. In June, a $19.5 billion bid by Aluminum Corp. of China, or Chinalco, to raise its stake in Anglo-Australian mining-giant Rio Tinto collapsed amid shareholder and political concerns. An earlier, successful deal by Chinalco, in which it paid $14 billion for an initial 9% stake in Rio in February 2008, is China's largest foreign investment in the resources sector.
My take.
China's aggressive resource accumulation has the following implications:
1. Economic-it has been amassing resources for its industrialization and rapidly progressing middle class.
2. Political-it has been using their immense foreign reserves as leverage to expand its geopolitical influence overseas, which could have some possible bearing on its desire to become a military and economic powerhouse.
This could be manifested by its thrust to elevate the yuan as an eligible international reserve currency and as possible candidate to the replacement of the embattled US dollar.
3. Security-it has been insuring itself from US government's policy to debase the US dollar.
Moreover, by expanding access to resources coupled with a build up in military and commercial logistics and expanding her sphere of global political influence, all these could also be interpreted as an insurance policy against future military conflict.
The apparent transition of the geopolitical order from unipolar to a multipolar framework cannot be guaranteed as orderly and peaceful.
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