China is making its biggest and boldest grab for overseas energy resources yet in a $15 billion deal for a Canadian oil producer. A takeover of Nexen by the Chinese state-run oil giant known as Cnooc would give China a number of footholds in the Gulf of Mexico, the Canadian oil sands in Alberta, the North Sea and the waters off Nigeria.
The Nexen deal is the latest effort by China to amass the natural resources it needs to stoke its powerful engine of growth. In particular, the country’s leadership has been focused on reducing dependence on oil imports, as China consumes some nine million barrels of oil a day, second only to the United States. From China’s point of view, the main issue has been energy security, and it always will be. And for Nexen, which is based in Calgary, the deal will provide an alternative to a stagnant United States market, where prices for Canadian oil have been weak.