China buys the Northsea

[Mega]

http://www.telegraph.co.uk/finance/n...-industry.html

Anything but $ !!!!!
Mike

[GRG55]

Re: China buys the Northsea

http://www.telegraph.co.uk/finance/n...-industry.html

Anything but $ !!!!!
Mike

Trust the Chinese to buy two oilfields that are "drying up"... :-)

[jk]

Re: China buys the Northsea

Trust the Chinese to buy two oilfields that are "drying up"... :-)

doesn't that just mean that these are fields where the exploration is over, and they are purely for production? i.e. they are buying barrels in the ground?
or are you smiling over the western media spin of suggesting that what has been sold to the chinese isn't anything for us to worry about?

[BadJuju]

Re: China buys the Northsea

It is such a stupid thing to sell. Those purchases for the Chinese will pay itself off probably many times over. It just smacks of corruption and insanity to me.

[Mega]

Re: China buys the Northsea

Oil in the ground = Money in the bank

[GRG55]

Re: China buys the Northsea

doesn't that just mean that these are fields where the exploration is over, and they are purely for production? i.e. they are buying barrels in the ground?
or are you smiling over the western media spin of suggesting that what has been sold to the chinese isn't anything for us to worry about?

Nexen is a company that has struggled to grow for many years. It has a management nightmare of assets spread all over (North Sea, Yemen, Nigeria, offshore Gulf of Mexico, Canada), an oil sands project that never met production expectations and their major production sharing agreement in Yemen, the Masila Block, expired last December with little prospect of replacing that asset with what they have left in that rather troubled country. It acquired the Buzzard field in the UK sector North Sea middle last decade just as the field was being developed for production (I got a nice play out of the stock as the I thought the deal made a lot of sense for them but the so-called "analysts" panned that purchase and I bought the stock on the dip), but that was the last major production increase for them. I don't think there was any option for the Nexen shareholders but to either break up the company and sell it off in pieces, or find a deep pocket buyer that might rationalize the asset base and try to invest more in what's left.

Talisman has 42 fields in the UK sector of the North Sea that are in harvest mode and it uses as a "cash cow" to fund other activities elsewhere. Since they don't want to re-invest in these assets to squeeze out the very last upside, and clearly don't want to take the reserves reduction on the balance sheet by selling it all, bringing in a partner that is willing to make the capex investment makes sense.

I don't know if it is "anything for us to worry about"...but these aren't the prettiest girls at the party. The Chinese are still not able to buy the trophy assets...

[GRG55]

Re: China buys the Northsea

It is such a stupid thing to sell. Those purchases for the Chinese will pay itself off probably many times over. It just smacks of corruption and insanity to me.

Corruption? How so?

[globaleconomicollaps]

Re: China buys the Northsea

Nexen is a company that has struggled to grow for many years. It has a management nightmare of assets spread all over (North Sea, Yemen, Nigeria, offshore Gulf of Mexico, Canada), an oil sands project that never met production expectations and their major production sharing agreement in Yemen, the Masila Block, expired last December with little prospect of replacing that asset with what they have left in that rather troubled country. It acquired the Buzzard field in the UK sector North Sea middle last decade just as the field was being developed for production (I got a nice play out of the stock as the I thought the deal made a lot of sense for them but the so-called "analysts" panned that purchase and I bought the stock on the dip), but that was the last major production increase for them. I don't think there was any option for the Nexen shareholders but to either break up the company and sell it off in pieces, or find a deep pocket buyer that might rationalize the asset base and try to invest more in what's left.

Talisman has 42 fields in the UK sector of the North Sea that are in harvest mode and it uses as a "cash cow" to fund other activities elsewhere. Since they don't want to re-invest in these assets to squeeze out the very last upside, and clearly don't want to take the reserves reduction on the balance sheet by selling it all, bringing in a partner that is willing to make the capex investment makes sense.

I don't know if it is "anything for us to worry about"...but these aren't the prettiest girls at the party. The Chinese are still not able to buy the trophy assets...

I don't know if I have said this before, but I cannot say enough how much I appreciate having an oil industry insider with real petroleum geology skills commenting on these deals. I would give an entire hedge-fund full of chart wielding "experts" for one hour of your time.

[BadJuju]

Re: China buys the Northsea

Corruption? How so?

Ah, maybe I shot off at the mouth a little. I just think that anyone that would forego massive earnings for minimal profit in the short term must be either insane or they are cooking something on the side.

[doom&gloom]

Re: China buys the Northsea

I don't know if I have said this before, but I cannot say enough how much I appreciate having an oil industry insider with real petroleum geology skills commenting on these deals. I would give an entire hedge-fund full of chart wielding "experts" for one hour of your time.

Maybe he'll climb out of the bunker long enough to do an iTulip interview?!

[Fiat Currency]

Re: China buys the Northsea

Never let a good "crisis" go to waste ...

U.S. senator urges Washington to use China’s bid for Nexen as leverage


U.S. Senator Charles Schumer said on Friday that the Obama administration should use a bid by China’s state-run CNOOC for Canadian oil company Nexen Inc. as leverage to fix long-standing trade and investment issues with China.

Mr. Schumer wrote to Treasury Secretary Timothy Geithner on Friday, saying he does not object to the $15.1-billion (U.S.) deal on its merits, but suggested the government should require China to address some thorny foreign investment and trade issues.

CNOOC has asked the Committee on Foreign Investment in the United States (CFIUS) to review the deal because Nexen has about 10 percent of its assets in the U.S. Gulf of Mexico.

CFIUS is an inter-agency committee that reviews foreign takeovers of U.S. assets for national security concerns.

“It is rare that we have so much leverage to exert upon China. We should not let this window of opportunity pass us by,” Mr. Schumer, a powerful Democrat in the U.S. Congress, said in a statement.

“At some point, we have to put our foot down over China’s refusal to play by the rules of free trade,” Mr. Schumer said.

Mr. Schumer suggested several “concrete steps” China should be required to take for CNOOC’s bid to gain approval from CFIUS, which is chaired by Mr. Geithner - all of them complex.

China should join a government procurement agreement, simplify its review system for foreign investments, step up enforcement of intellectual property infringements, and require its provincial and municipal governments to make certain reforms as a condition for U.S. approval of the takeover, Mr. Schumer said.

By law, the Treasury Department cannot comment on CFIUS reviews, a spokeswoman said.

http://www.theglobeandmail.com/repor...rticle4443807/

[doom&gloom]

Re: China buys the Northsea

Mr. Schumer has been a busy busy busybody boy of late. Seems he has many opinions on many things. I am sure the sovereign country of Canada is very keen to have his advice. Not.