Chinese firm to buy Unocal?

The Wall St. Journal reports China's 3rd-largest oil and natural gas company, China National Off-Shore Oil Corp., is eyeing Unocal Corp., one of the largest US independent oil companies: "The notion that a Chinese state-owned company would be considering bidding for a 115-year-old publicly traded U.S. firm would have been unthinkable 5 years ago."

Unocal has operations in eight countries outside North America, and has been particularly active in developments in south-east and Central Asia -a hotspot for US-China resource competition. Financial Times notes that the only significant Chinese purchase to date of a US energy group was Sinopec's $153m acquisition last August of First International Oil Corporation, a Houston-based company with assets in Kazakhstan. Unocal produced 465m barrels a day in 2003 and had proved reserves of 1.2bn barrels, a third of them liquids and the balance in gas.

The WSJ article is a good wrap-up of recent moves by China in the resource hunt: China and Canada are nearing agreement on Chinese investment in Canadian oil resources. China Minmetals Corp., a state-controlled trading gant, is in talks to buy Canada's Noranda Inc., the world's 3rd-largest producer of zinc and 9th-largest of copper. CNPC might become a minority investor in a new Russian state oil company, and China is conducting oild and gas exploration in Africa and has set up refinery operations. It has deals in Sudan, Gabon, Angola and South Africa. China's also moving agressively into Latin and Central America, on the hunt for resources. China's now the 2nd- largest oil investor in Peru and moves have been made into Ecuador and Venezuela.