China prepares to buy up foreign oil companies

China is preparing to open a new phase in its race for the world’s resources by using its huge currency reserves to buy foreign oil and gas companies.

This proposal may risk a backlash from countries who fear that China is using the world’s economic crisis to tilt the balance of trade and diplomacy in its favour.


A conference of officials from the National Energy Administration has agreed to consider establishing a special fund for China’s state-owned companies to buy oil and gas firms overseas. The beneficiaries would be the Beijing’s three giant energy companies – Petrochina, Sinopec and CNOOC.

“Firms will be able to benefit from low-interest loans and, in some cases, direct capital injections,” according to China Petroleum Daily.

This state money would be used to fund takeovers or mergers with resource companies abroad. Which foreign firms, if any, have been identified for takeover has not been disclosed. But the dramatic fall in oil prices since last summer, and the strains caused by recession, have driven down the share prices of many energy companies, making them more affordable targets for predatory competitors.

Telegraph