Watch Out China Energy Majors, Here Comes India 能源公司注意：印度来了
China’s energy majors may soon discover they’re not the only ones out in the international marketplace looking for assets to feed their hungry home economy, just as life at home also becomes more difficult as their domestic operations face more scrutiny over environmental issues. First a look at what’s happening overseas, where India has approved new rules allowing its state-run energy giants to pursue global M&A without first seeking government approval. (English article) The move will help to streamline a process that can delay overseas M&A bids by months, and is clearly aimed straight at economic rival China, whose CNOOC (NYSE: CEO; HKEx: 883), PetroChina (NYSE: PTR; Shanghai: 601857; HKEx: 857) and Sinopec (HKEx: 386; NYSE: SNP) have been particularly active on the global M&A scene these past few years in Beijing’s quest to make the country more energy self sufficient. As state-run companies, the China majors never bid against each other, though they frequently do come up against competition from major Western firms and aren’t afraid to overpay for assets, as exemplified by Sinopec’s plan announced this month to buy Canada’s Daylight Energy for double its market value when the deal was announced. (previous post) Look for this kind of premium to shoot even higher as Indian firms enter the fray, boding well for owners of energy assets but poorly for other big energy producers. Meantime at home, CNOOC is facing more production woes with its latest admission that one of its pipelines in the Bohai Bay had a “minor” leak and had to be shut down to make repairs. (company announcement) People who follow CNOOC will know the company and ConocoPhillips (NYSE: COP) used the word “minor” to describe a problem at one of their co-owned oilfields in Bohai Bay, even though the problem was later described by some environmental officials as a disaster. It’s probably still too early to say if this latest problem will rise to the “disaster” level. But one thing is clear, namely that CNOOC, PetroChina and other energy exploration companies in China will no longer have the rights that they had for most of the last 60 years to quietly cover up their accidents that cause major environmental damage and will have to behave more responsibly, which will ultimately hit their bottom lines.
Bottom line: India’s loosening of restrictions on foreign energy M&A means CNOOC, PetroChina and others will soon face a well-funded new competitor in the global market for energy assets.
Related postings 相关文章:
◙ Pricey M&A, Cheaper Gas Undermine Sinopec 溢价收购和成品油降价 中石化面对双重利空
◙ CNOOC Woes Spotlight Environmental Perils
◙ CNOOC’s Latest M&A: A Shaky Oil Sand Castle 中海油收购加国油砂生产商或招来更多麻烦
