A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

[touchring]

China can afford to pay for BP in cash. At this point it is getting attractive, even if BP has to stop operating in the USA. After all, they will buy using free money sent over by the Americans. Buying BP is far cheaper than waging an oil war, which can easily cost $1 trillion even for a short war, not to mention lives, tens of thousands maimed, and lost of good will.

If this happens, it will be interesting how the Americans and British will react.

[ThePythonicCow]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

If this [China tenders an offer for BP] happens, it will be interesting how the Americans and British will react.

I predict that the reaction could be summarized in one word: nyet.

[Rajiv]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

Would China want to accept the liabilities that will come attached to BP? At some points, the liabilities will exceed the assets.

[ThePythonicCow]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

Would China want to accept the liabilities that will come attached to BP? At some points, the liabilities will exceed the assets.

The liabilities they could cover ... with some of the Treasuries they hold.

The long term access to more oil would be valuable to them.

But there's no way the UK would allow this, in my view.

[Rajiv]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

If they buy BP, the US Government gets the upper hand immediately. Remember it is the US Government that will determine what damages to assess on BP. Right now the downside to BP is unlimited.

[touchring]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

If they buy BP, the US Government gets the upper hand immediately. Remember it is the US Government that will determine what damages to assess on BP. Right now the downside to BP is unlimited.

The Chinese are pretty hardcore when it comes to hoarding commodities. Speculators can drive up the price of garlic 10 times just a couple of months ago. Rare metals are going to be banned for export if not already banned.

[c1ue]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

Very stupid post.

If the US refused to allow China to buy Unocal, why would either the UK or the US allow China to buy BP?

[touchring]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

It's a crazy scenario, but if Obama squeezes hard enough, the Brits may pursue the idea of selling BP it to their enemy. Once the Chinese get hold of the oils, it will be reserved for China use only.

http://blogs.wsj.com/deals/2010/06/1...na-acquire-bp/

* June 10, 2010, 10:50 AM ET

China to the Rescue: Will PetroChina Acquire BP?

By Michael Corkery

While it is difficult to know for certain what the Obama Administration believes will be the end game for BP, Deal Journal is pretty sure it isn’t this: A take over by PetroChina, a deal that would give the Chinese oil giant a huge hold on the world’s energy supplies.

Associated Press
BP PLC CEO Tony Hayward

And yet analysts at Standard Chartered Bank are making waves this morning with a report that floats out the idea of a PetroChina-BP merger.

PetroChina, which has a $60 billion war chest for acquisitions, is seeking to tap into overseas reserves to feed China’s insatiable demand for oil. According to Bloomberg, Chinese demand for crude is expected to rise at 15 times the rate of the demand in the US. And acquisition of BP would give PetroChina access to 18 billion barrels of oil and gas reserves around the world — a huge boost to its overseas supplies.

twitter

“We expect a full dose of skepticism on this as a real-world proposition, although we argue for the persuasive economics,” according to the Standard Chartered report.

That “real world” skepticism, of course, is grounded in the fact that U.S. regulators aren’t likely to look kindly at a Chinese oil company becoming the largest offshore oil producer in the Gulf of Mexico. Politically, a PetroChina-BP deal would about as easy to digest as the tar balls washing up on Louisiana beaches. Remember what happened when Cnooc tried to buy California’s Unocal Corp. for $18.5 billion in 2005. Back then, U.S. politicians worried about Chinese influence on world energy supplies, and nationalistic sentiments have only gotten stronger amid today’s difficult economy. Also, we can’t imagine how happy U.K. pensioners, who own BP shares, would be about having new Chinese owners. That likely pushback would mean any deal would need to involve all cash.

Earlier this week, Royal Dutch Shell and Exxon Mobil were being mentioned as possible suitors for the badly batter BP, which is facing questions about its ability to survive the fall out from the spill. Its market value has been more than halved – shedding $82 billion–since the spill began nearly two months ago.

Then, again, all of this apocalyptic speculation about takeovers and bankruptcies could be overblown. J.P. Morgan Chase analysts said this morning that BP’s market value has fallen twice as much as it should have in reaction to the spill. The investment bank estimates that clean-up costs, fines and litigation should cost no more than $29 billion ($10 billion less than the Credit Suisse estimate that is being floated around)

While these costs may require BP to sell $10 billion in assets, it doesn’t justify the stock’s huge sell off, according to JP Morgan. A few brave bulls seem to agree. BP stock is up 11% this morning.

[c1ue]

Re: A possible scenario: China makes an offer to buy BP, China certainly can offer an all cash offer at this point.

It's a crazy scenario, but if Obama squeezes hard enough, the Brits may pursue the idea of selling BP it to their enemy. Once the Chinese get hold of the oils, it will be reserved for China use only.

This statement is not fiction, it is fantasy.

Obama is going to do what he has been doing: talk a lot but do nothing.

The British (presumably you mean the UK government) don't own BP, and hardly are going to sell it off.

Any time someone starts yapping about oil companies getting bought by nations (or representatives of nations), I immediately look to see what is behind the curtain.

The US, for example, could theoretically print up several trillion dollars to buy ARAMCO.

But would that ever happen? I think not. Even if the printing presses were going full speed, the Saudis themselves would not permit it.

The only time oil reserves at the oil company level change hands is when a sovereign government seizes it - or in the case of the collapsed USSR, economic hit men bribe government officials to steal it. Who's going to get bribed here? And what could possibly be enough?