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Snapshot: Chinese Investment in North American Energy in 2012

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Nexen has oil and gas operations in locations including Colombia, Yemen and Canada. Here, a worker walks past a drilling rig at Nexen's shale gas facility in northeastern British Columbia. (Photograph courtesy Nexen)

North American companies are raising both cash and controversy recently in deals with Chinese firms: both American battery maker A123 and Canadian oil and gas firm Nexen have made headlines in recent weeks as some U.S. politicians question the transactions on the basis of national security. China has been ramping up foreign investment in energy as part of its efforts to meet skyrocketing demand and gain knowledge to develop its own resources. Those resources include shale gas, which has seen a boom in the U.S. and Canada thanks to the rise of hydraulic fracturing, or fracking.

Thilo Hanemann of the Rhodium Group, which tracks Chinese direct investment in various sectors of the U.S. economy, sees increased interest from China in North American oil and gas. “More than half of global [merger and acquisition] transactions in oil and gas are happening in North America, so if you want to expand your global assets, you have to be in the game there,” Hanemann said in an e-mail.

Nexen and A123 are just the latest targets in a slew of bids from China this year in the North American energy sector. Below, a list of key deals:

JANUARY

Parties: Sinopec, Devon Energy
Value: $2.5 billion
Status: Deal closed

The deal between China’s second-largest oil company and the Oklahoma-based Devon included $900 billion up front for a stake in five exploratory oil and natural gas projects with an additional $1.6 billion for future drilling. The investment should help China gain valuable knowledge on shale gas exploration as it attempts to develop its own resources at home.

Parties: PetroChina, Athabasca Oil Sands Corp.
Value: $685 million
Status: Deal closed

The Calgary-based Athabasca sold its remaining 40 percent stake in the MacKay River oil sands project to PetroChina after selling it a 60 percent stake last year, giving China’s largest oil and gas producer full ownership.

FEBRUARY

Parties: China Investment Corp, EIG Global Energy Partners
Value: Not disclosed
Status: Deal closed

The sovereign wealth fund acquired a minority stake in EIG, a $9.5 billion investment fund focused solely on the global energy sector.

Parties: PetroChina, Shell
Value: Not disclosed
Status: Deal closed

PetroChina’s acquisition of a 20 percent stake in the Shell*-owned Groundbirch shale gas project in British Columbia complements the companies’ joint efforts on shale development in China.

MAY

Parties: PetroChina, Valero
Value: $350 Million
Status: Talks

PetroChina has expressed interest in an Aruba refinery that Valero shuttered in March of this year. If the deal goes through, the 235,000 barrel-per-day facility would be one of several planned refinery acquisitions by the oil and gas producer. In March, company chairman Jiang Jiemin said Petrochina planned to “buy assets on a large scale” both inside and outside China.

Parties: Wanxiang, GreatPoint Energy

Value: $1.25 billion

Status: Deal closed

The Chinese conglomerate took a minority stake worth $420 million in the Massachusetts-based alternative energy company as part of the deal, which will result in the construction of a facility in Western China to convert coal into natural gas.

JULY

Parties: Cnooc, Nexen
Value: $15.1 billion
Status: Approval pending

The China National Offshore Oil Corporation’s bid for the Canadian oil and gas company is subject to approval by regulators in both Canada and the U.S., where Nexen has drilling operations. Some U.S. lawmakers have expressed concerns over the proposed deal. Sen. James Inhofe (R-Okla.) said in an e-mailed statement that national security risks, “combined with China’s closed economy, its prohibition on direct, full investment in Chinese business operations by U.S. firms, and its blatant disregard to U.S. intellectual property rights make this transaction even more concerning.”

Parties: Sinopec, Talisman Energy
Value: $1.5 billion
Status: Deal closed

Sinopec’s investment in the Canadian oil and gas company gives it a 49 percent stake in the latter’s British North Sea business.

AUGUST

Parties: Wanxiang Group, A123 Systems
Value: $450 million
Status: Pending

The struggling car battery maker got a much-needed lifeline with the cash infusion from auto parts maker Wanxiang, which would gain an 80 percent stake in A123. But A123 received a $249 million federal grant in 2009, leading to questions and criticism about the wisdom of the grant and whether the deal should be allowed to go through given the government’s investment in A123.

*Shell is sponsor of National Geographic’s Great Energy Challenge Initiative. National Geographic maintains autonomy over editorial content.