Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

[Tom Kirkman + 8,860]

Not far fetched.  China has previously attempted this.  Will need to wait and see if China will set up a shell company and try again.

 

Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

Plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere.  ...
 

... “We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission -- the agency that regulates the state's oil and gas industries.

“I believe it's a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United States," he told FOX Business.  ...

 

... “The federal government should watch very carefully and raise their standards on who can buy,” Christian said.

China and other countries are already “starting to look for deals,” said Malcolm McNeil, international practice co-leader at the law firm Arent Fox.  ...

 

... Should President Trump win re-election, prospective acquisitions might be less appealing to Chinese buyers, given his administration's prickly relationship with Beijing and efforts to limit Chinese control of vital U.S. resources.

Any oil deal, unless it’s rudimentary, will likely involve the Committee on Foreign Investment in the United States (CFIUS), which would require arduous reviews. U.S. law prohibits foreign companies from directly holding many oil, gas and mineral leases, but does allow them to form U.S. corporations to make purchases.

Chinese acquisitions of U.S. oil and gas companies have faced increased scrutiny since China National Offshore Oil Corporation in 2005 attempted a takeover of the El Segundo, California-based explorer Unocal, now a subsidiary of Chevron, causing public uproar.

While that deal was blocked, the Chinese firm Yantai Xinchao Industry Co. in 2015 received CFIUS approval to forge ahead with a $1.3 billion purchase of oil assets in the Permian Basin owned by Tall City Exploration and Plymouth Petroleum.  ...

 

... A more plausible way for foreign companies to gain access to the rock, according to Glickman, is to enter a joint venture that gives them financial exposure but not operational exposure. He added that such a route would also be the way to go for those seeking to gain access through midstream and downstream businesses.

But while the tactic might help eager overseas buyers reach lucrative deals, such developments are precisely what Christian, the Texas railroad commissioner, hopes to avoid.

“I don’t want to wind up five years from now with, all of a sudden, some foreign country shutting down production in Texas because they own it, and prefer buying from their own reserves overseas,” Christian said. “I think that would be inefficient use, and I would think it would threaten national security.”

 

[Prometheus1354 + 178]

Tom;  if nothing else has awoken the corporate boardrooms too the threat of a China invasion; the Wuhan sure as hell better of!  SoS Pompeo was correct in stating that US Oil companies in financial distress; are not and Cannot be 'for sale' too Chinese interests. Period, Full stop.

President Trump understands the importance of the Permian.  He knows full well that if the US allows ill funded/cash strapped oil companies that find themselves "on the brink"  to fall into the hands of China. Solely because of the havoc wreaked on not only the US but the World's economy from the Wuhan; this will be catastrophic for our ability to fully attain energy independence.  Instead of loading up a train of tankers from the MEA. We would be forced too 'import' oil from right beneath our very feet.  

[Junior Geo + 25]

There has been similar buying of struggling O&G companies here in Canada. Saudi's buying portions of companies, Chinese buying entire companies. A noticeable decrease in "true" Canadian O&G companies remaining here in Canada. I hear more and more stories of foreign investment buying up companies and resources here. More specifically, the Saudi fund has bought large portions of two Canadian oil sands producers (Suncor and CNRL).

I broke into the Canadian industry as a geologist in 2018. Apparently in 2014 there were over 400 oil companies here. As of 2020 I believe there are now less than 200 remaining. It will be interesting to see if junior companies will take the reigns here in Canada.

On a side note, out of my graduating class of 80 geologists, only two are working in the oil industry now. I see articles stating the young people are avoiding oil and gas. From personal experience, the only reason young people avoid it is because companies don't hire/train new grads anymore. Much easier to find work in environmental where they want new grads and are willing to train them. Just some random thoughts by myself.

[wrs + 893]

36 minutes ago, Junior Geo said:

There has been similar buying of struggling O&G companies here in Canada. Saudi's buying portions of companies, Chinese buying entire companies. A noticeable decrease in "true" Canadian O&G companies remaining here in Canada. I hear more and more stories of foreign investment buying up companies and resources here. More specifically, the Saudi fund has bought large portions of two Canadian oil sands producers (Suncor and CNRL).

I broke into the Canadian industry as a geologist in 2018. Apparently in 2014 there were over 400 oil companies here. As of 2020 I believe there are now less than 200 remaining. It will be interesting to see if junior companies will take the reigns here in Canada.

On a side note, out of my graduating class of 80 geologists, only two are working in the oil industry now. I see articles stating the young people are avoiding oil and gas. From personal experience, the only reason young people avoid it is because companies don't hire/train new grads anymore. Much easier to find work in environmental where they want new grads and are willing to train them. Just some random thoughts by myself.

That is exactly what happened in the mid 80s to a lot of recent PLM, PE and Geology grads from the late 70s and early 80s here in Texas.

[Junior Geo + 25]

17 minutes ago, wrs said:

That is exactly what happened in the mid 80s to a lot of recent PLM, PE and Geology grads from the late 70s and early 80s here in Texas.

It is a tough time. I bounce from 4 month contract to 4 month contract. Hoping to land something full-time sooner than later. Any advice to keep ones self competitive in the job search?

[footeab@yahoo.com + 2,190]

On 5/17/2020 at 4:33 AM, Tom Kirkman said:

Not far fetched.  China has previously attempted this.  Will need to wait and see if China will set up a shell company and try again.

 

Texas fears losing oil-rich lands in Chinese takeover of weakened energy companies

Plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere.  ...
 

... “We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission -- the agency that regulates the state's oil and gas industries.

“I believe it's a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United S

All natural resources should not be able to be mined by any foreign company and likewise no natural resources company should be able to be bought by any partially or fully owned foreign company.  Personally, I would include ALL land/property in this description.  Zero foreign ownership.  Most countries already have these policies.  Why the Hell the USA does NOT is stupid. 

[wrs + 893]

51 minutes ago, Junior Geo said:

It is a tough time. I bounce from 4 month contract to 4 month contract. Hoping to land something full-time sooner than later. Any advice to keep ones self competitive in the job search?

No, unfortunately many of my friends switched careers or moved to other places to follow the work.