Cash-Rich China Eyes More Global Energy Assets 财大气粗的中国企业着眼更多全球资源并购
There are a few interesting items out today on the energy sector, spotlighting two recent trends that have seen China become a major player on the global M&A stage, while its energy majors also suffer from growing exposure to liability industrial from accidents. In the first category, Yanzhou Coal (HKEx: 1171; Shanghai: 600188; NYSE: YZC) and Sinopec (HKEx: 386; NYSE: SNP) are reportedly exploring major new deals in Australia and Spain; while in the second category oil producer CNOOC (HKEx: 883; NYSE: CEO), already embroiled in an environmental mess off the northeast China coast, is reporting more similar woes at one of its southern China operations. Let’s look at the latest M&A deals first, which are seeing Yanzhou make a $2 billion bid for Gloucester Coal (Sydney: GCLAX) (English article), while Sinopec is reportedly eyeing a 2.7 billion euro bid for 10 percent of Spanish oil major Respol, part of a bigger stake held by indebted Spanish developer Sacyr Vallehermoso. (English article) What both of these deals have in common is that the assets are being sold by owners under financial pressure to raise funds, a factor that will play to the advantage of Chinese firms that are not only cash rich, but also have easy access to credit due to Beijing’s desire to become more energy self sufficient. That combination of tight credit outside China and Beijing’s desire buy global assets should help to make 2012 a big year for Chinese acquisitions of global resource assets, especially as cash-strapped global companies look to sell such assets to raise quick funds. (previous post) Meantime, CNOOC has issued a press release saying one of its gas units in the southern city of Zhuhai near Macau has discovered a leak in one of its nearby offshore subsea gas pipelines. (company announcement) Following the discovery, CNOOC was forced to shutdown production of some wells, and, equally important, is incurring extra costs from emergency measures it is taking to avoid pollution, explosions and other accidents. This latest setback comes as the company faces billions of dollars in liability related to oil leaks at an oil field it is developing off the northeast China coast with ConocoPhillips (NYSE: COP). The accidents spotlight the growing risk that CNOOC, Sinopec and other energy firms are facing as they expand both inside and outside China, and as Beijing puts growing importance on workplace safety and environmental protection.
Bottom line: New developments indicate 2012 will be a big year for global M&A by China energy firms, which will also face growing risk from industrial accidents.
Related postings 相关文章:
◙ 2012: The Year of China Resource M&A? 2012：中国企业的资源并购年？
◙ Sinopec Latest Victim of Environmental Scrutiny 中石化管道工程因环保计划不足被叫停
◙ Yanzhou’s War Chest Gets Fatter on New M&A Model 兖州煤业将为中国同行树立榜样
