Why Is USA Allowing China To Buy Up U.S. Oil And Gas Deposits?

Why Is The Obama Administration Allowing China To Buy Up U.S. Oil And Gas Deposits?


May 13, 2012


Michael Snyder
BLN Contributing Writer

If we are trying to become independent of foreign oil, then why is the Obama administration allowing the Chinese government to buy up U.S. oil and gas deposits worth billions of dollars? This makes absolutely no sense whatsoever. The United States desperately needs to maintain control over its own domestic energy resources so that we can end our addiction to foreign oil.



As I have written about previously, the United States actually has plenty of oil. If we would simply use the resources that we already have, we would never have to import a single drop of foreign oil. But instead, we continue to be the largest importer of oil on the planet and we are allowing China to rapidly buy up oil and gas deposits inside the United States. This is fundamentally wrong and it is a serious threat to our national security. But apparently everything is for sale in the United States today, and that includes our precious energy resources.

The Chinese government is using two giant corporations to buy up these energy resources.

The first is the China National Offshore Oil Corporation (CNOOC). According to Wikipedia, this corporation is 100 percent owned by the Chinese government....

CNOOC Group is a state-owned oil company, fully owned by the Government of the People's Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government.
The second is Sinopec Corporation. Sinopec Group is the largest shareholder (about 75% of the shares) in Sinopec Corporation. And as the Sinopec website tells us, Sinopec Group is owned by the Chinese government....

Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large petroleum and petrochemical group incorporated by the State in 1998 based on the former China Petrochemical Corporation. Funded by the State, it is a State authorized investment arm and State-owned controlling company.
So wherever you see CNOOC or Sinopec you can replace those names with the Chinese government. The Chinese government essentially runs both of those companies.

And both companies have been very busy buying up U.S. oil and gas deposits.

For example, CNOOC recently completed a 570 million dollar deal that gives it a one-third interest in huge oil and gas deposits in Colorado and Wyoming. The following is from Wyoming Energy News....

Chinese energy company Cnooc Ltd. has agreed to pay $570 million for a one-third interest in Chesapeake Energy Corp.’s 800,000 leased acres in northeast Colorado and southeast Wyoming. The acreage is in the Denver-Julesburg (DJ) and Powder River basins. Cnooc is China’s biggest offshore oil and natural gas producer.
In fact, according to a recent Business Insider article, this deal gives the Chinese government the right to a third of any new oil discovered by Chesapeake Energy in the entire region....

The Niobrara Shale formation stretches over Colorado and Wyoming, as well as Kansas and Nebraska. Chesapeake Energy's position is in Wyoming and Colorado. If Chesapeake find any more oil in this region, CNOOC has the rights to 33.3% of what is found.
But this is not the only area of the country where China now owns energy rights. The following is an excerpt from a recent state-by-state breakdown that appeared in the Wall Street Journal....

Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.

Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.

Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.

Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.

Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.
The Texas deal was particularly noteworthy. The following is how a San Antonio news source described that deal....

State-owned Chinese energy giant CNOOC is buying a multibillion-dollar stake in 600,000 acres of South Texas oil and gas fields, potentially testing the political waters for further expansion into U.S. energy reserves.
With the announcement Monday that it would pay up to $2.2 billion for a one-third stake in Chesapeake Energy assets, CNOOC lays claim to a share of properties that eventually could produce up to half a million barrels a day of oil equivalent.

So why is the Obama administration allowing this to happen?

Are they so desperate to have China continue lending money to the United States that they would allow the Chinese government to pillage our precious energy resources?

Somebody needs to be asking our politicians that question.

But oil and gas are not the only U.S. assets that the Chinese have been buying up.

In a previous article, I detailed how the Chinese have been purchasing huge chunks of real estate all over the country as well.

For example, a recent Forbes article detailed some of the real estate deals that China has been doing in New York....

According to a recent report in the New York Times, investors from China are 'snapping up luxury apartments' and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.
In addition, it was recently announced that the Federal Reserve will now allow Chinese banks to buy up American banks.

Where will all of this end?

Should all of us start learning to speak Chinese?

Meanwhile, our trade deficit with China continues to get even larger. Our trade deficit with China last year was $295.5 billion, which was the largest trade deficit that one country has had with another country in the history of the world. This year, we are already on a pace to break that record.

So thousands of businesses, millions of jobs and hundreds of billions of dollars will continue to leave the United States and go to China.

And China will continue to use some of the money they are getting from us to buy up pieces of America.

Does anyone else out there see something very, very wrong with all of this?

Let's consider a possibility for a moment. Sure maybe it's inaccurate but let's entertain it despite that at least briefly.

What if oil is created abiotically rather than the fossil fuel explanation?
Well in that case, it would make perfect sense why the US would sell it. Because there's plenty of it.
Makes a lot of sense actually.

But on the other hand, lets go with the fossil fuel hypothesis as an angle to view this from.
In that event, we are left with a few possibilities:
1) We are idiots to sell it.
2) We have way more deposits than is admitted publicly.
3) This could be a subtle method of "paying the Chinese back" and they just aren't admitting it.
4) Other explanation I didn't mention yet.

There may be a few reasons:

1. We need money
2. We don't have much leverage
3. This is part of the plan to remove sovereignty
4. Why delay the inevitable
5. China owns us
6. They are buying time so they can finish the building of their bunkers before you-know-what happens
7. We aren't trying to become independent of foreign oil, we are just trying to control the middle east oil
8. Globalization
9a You hit it on the head, its a selloff. When people/companies know they are broke, what do they do? Liquify their assests
9b We are broke, everything must go!

Obama promised change

It is a bad idea up front, but regardless of it, we still will be surrounding the deposits in question. They will be but an island in the middle of a sea of Red, white, and blue. Should the tide ever turn we can just retake the property. If the government allows it, but who cares if they don't, remember the Constitution: people > state > Federal > "foreign entanglements".

Lets not split hairs, the government does not represent the heart and soul of the american people. Only each other and strength and loyalty to the constitution will see us through this. Disclaimer, up until the second Dubya admin, first 22 years of my life I was what one would call a flaming Liberal. I got better. I hope the rest of them shake their Frankfurt School socialist higher education indoctrination.

China exists today because of America, so they kinda owe us. We were the ones that stood up and put sanction after sanction, embargo after embargo on Japan to self-servingly protect our interests in the far east. To the point of war and the loss of american life. We should never be the servants of those we saved. And we should never be the servants or slaves of those who claim to have our best interests at heart. We are the kings, if we just realize it.

reply to post by muzzleflash


Maybe, Chesapeake Energy Corp. along with other energy companies and the US government know that oil and other conventional energy assets are going to be losing their value in the near future because of a new energy source soon to be made public. If you look carefully you will find several “unusual” energy related news like this over the past 6 months.

reply to post by Surfrat


Why? Just follow the money trail? Its about more screwing the American people while lining the pockets of the criminals who are presently occupying the US government. Do you think when the mercenary military called the pentagon finish off the American people. That these traitors plan to stick around? No wonder they are attempting to make it impossible for any of us to leave the US. Some of us might hunt them down for the dogs that they are. As long as they are rich on our money they believe they will be welcome anywhere. Why the host countries would want them i can't answer. Why not simply take their money and extradite them back to where they come. Hell is a good start.

China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.
The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.
www.reuters.com...

I've been expecting this for a long time now. We owe and ultimately we pay.

Our country, us included, is owned by the government who borrowed using it as collateral.

When you can't pay the dealer-man, he comes over to your house and takes whatever you have to sell it and pay your debt. Then he stops dealing to you and you have to go cold turkey. He's nicer than the loan shark.

It will be interesting when the chinese come here to do business and find the regulations are too oppressive for that communist regime!