Private energy player China CEFC Energy has repeatedly made headlines over the past two years, first with its ambitious deals — most notably for a 4% stake in Abu Dhabi’s onshore concession and a 14.2% stake in Rosneft — and then with its rapid disintegration, which culminated last week in the cancellation of its $9.1 billion Rosneft stake acquisition. CEFC has been the most attentiongrabbing — and arguably the most reckless — of China’s emerging energy players, but with several other entities actively scouring the world for upstream investments, would-be partners must consider the risks of teaming up with these opaque and often inexperienced firms (PIW Sep.18’17). These companies saw an opportunity to raise their profile after China’s Big Three — China National Petroleum Corp. (CNPC), Sinopec and China National Offshore Oil Corp. — deserted M&A markets in the wake of a 2009-13 buying binge that left them overleveraged and subject to a vigorous anticorruption campaign (PIW May29’17). Low oil prices from late 2014 onward enticed these smaller players to venture overseas and scout out discounted assets. Chinese President Xi Jinping’s Belt and Road Initiative gave them the means through accelerated and cheaper financing. The largest players putting that capital to work in oil are state-owned, with military-backed Zhenhua Oil producing around 200,000 barrels per day and Hong Kong-listed Citic Resources some 50,000 b/d. Smaller private sector players include Shanghai-listed Geo-Jade Petroleum and Hong Kong-listed United Energy.
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