Do We Want To Buy Canadian Oil From The Chinese?

Buoyed by White House inaction, China's state-owned oil company has made a multibillion-dollar bid for a Canadian company with interests in Canada's oil sands — North American oil for the lamps of China. 'Do we really want to be buying our oil or Canadian oil back from the Chinese?" asked Sen. John Hoeven on Thursday as he reacted to news that China's state-owned oil company, CNOOC Ltd., had launched a $15.1 billion takeover bid for Canada's Nexen Inc., a company with operations in the Gulf of Mexico. Our answer would be no. But it may happen, thanks to the Obama administration's indifference to developing energy resources anywhere on the North American continent or building the Keystone XL pipeline linking Alberta's oil-rich sands to refineries on the Gulf Coast. Prior to Nexen, CNOOC has made roughly $6 billion in smaller acquisitions in recent years. It has most notably hooked up with Chesapeake Energy for a joint venture in the Eagle Ford Shale formation in Texas, and with Norway's Statoil in the Gulf of Mexico, an area where the Obama administration has placed draconian restrictions on U.S. drilling. CNOOC is just one state-owned Chinese company seeking to quench China's thirst for energy. Total acquisitions by Chinese energy firms jumped from less than $2 billion between 2002 and 2003 to nearly $48 billion in 2009 and 2010, according to the International Energy Agency. As the Institute for Energy Research reports, PetroChina, owned 86% by the Chinese government, produced 2.4 million barrels of oil a day last year, surpassing Exxon by 100,000. PetroChina's output increased 3.3% in 2011 while Exxon, the former leader, fell 5%...more