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RIA Novosti

World

China bids for U.S. oil company

13:32 09/06/2005
MOSCOW, June 9 (RIA Novosti) - In an apparent move to diversify its oil imports, Chinese oil company CNOOC has bid for oil assets in the Caspian, offering to take over U.S. oil corporation Unocal and possibly affecting Russian interests since Unocal has assets in many Asian projects, including Baku-Tbilisi-Ceyhan (BTC), Gazeta, a daily, reported.

The international oil pipeline BTC, where Unocal has an 8.9% stake, was built to allow Azerbaijan to export its Caspian oil, part of which could now go to China.

Chinese oil imports grew by 50% in the last few years to around 90 million tons per year, with the prospect of doubling this figure by 2010 and overtaking the United States in terms of crude imports by 2030. The United States currently imports 300 million tons per year.

Russia is a natural candidate for a share in the Chinese oil market, but a pipeline from East Siberia to China was a vague prospect until late 2004.

According to the Russian state-owned oil transport monopoly Transneft, CNOOC newly acquired Unocal assets will occupy part of Russia's potential niche in China by the time the oil route becomes operational in 2008.

However, the Unocal-CNOOC takeover is not yet sealed and might never be if Washington refuses to bless the deal. Chinese companies are notorious for their business spying practices, which could irritate Washington. What's more, 35% of Unocal's assets are U.S.-based, and to through open the gates for such a powerful player as CNOOC would be naive. Unocal has also been targeted by ChevronTexaco, one of U.S. oil champions, who offered Unocal around $16 billion in April.

Accordingly, analysts believe the Chinese offer was more of a trial balloon than a strong trend. China is most likely to seek additional oil in Russia.

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