WSJ: Canada is starting to ask questions and say no to Chinese Oil Deals

China makes billion dollar Canadian energy acqusition

Cnooc Ltd. (883) agreed to pay $15.1 billion in cash to acquire Canada’s Nexen Inc. (NXY) in the biggest overseas takeover by a Chinese company.


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China no longer likes the risks associated with the derivatives markets

China delivered a blow to some of the world’s biggest investment banks on Monday as it declared its support for legal efforts by some state-owned companies that want to break loss-making oil derivatives contracts with foreign institutions.

The state-owned Assets Supervision and Administration Commission of the State Council said it was investigating a number of derivatives deals and would help companies find ways to “minimise losses”.

The move is the latest by Beijing to clamp down on the over-the-counter derivatives market after a number of state companies made disastrous bets on commodity prices and foreign exchange movements, losing billions of dollars.

But it will be greeted with dismay by foreign financial institutions, already reeling from a July decision by China’s banking regulator that sought to prevent state-owned enterprises from accessing the overseas derivatives market through domestic intermediaries.

Financial Times article

Output at China's Huge Daqing Oilfield Slows in '08

Rigzone

Crude oil output in PetroChina's Daqing oilfield, China's largest, fell 3.6 percent from a year earlier to 40.2 million tonnes in 2008, or 804,000 barrels per day, Xinhua News Agency reported on Wednesday.

Natural gas output in the field, run by PetroChina , the listed arm of state oil giant CNPC, reached 2.76 billion cubic meters, according to the report on www.xinhuanet.com.cn.

Daqing accounts for more than a third of PetroChina's domestic oil production, which was 107.64 million tonnes in 2007. Its importance in the firm's gas output is much less, making up 5 percent of last year's 54.2 billion cubic meters.

The field alone is responsible for more than one fifth of China's total oil production, which CNPC expects to reach 189 million tonnes in 2008.