Yantai Xinchao and a second Chinese firm will shell out $1.3 billion to purchase oil fields owned by two Texas companies. China has been gobbling up America by investing billions of dollars here. Since 2000, they have been rapidly investing their way to ownership of many industries on the U.S. landscape.
The oil fields are owned by Tall City Exploration and Plymouth Petroleum, and are located in Howard and Borden counties in what’s known as the Permian Basin, and is only part of a larger deal with Chinese firms. The Permian Basin is the oldest oil field in Texas. Why do they want it? Shale extraction. And their companies are shaking their investment trees to make it work in a rocky Chinese stock market.
CNN money reported,
Yantai Xinchao shares were suspended from trading last Friday to allow for the asset restructuring and oil field purchase. The company expects shares to be halted for about one month, and plans to release periodic updates on the restructuring, according to another stock exchange filing.
Their oil field investment has already been approved by the United States Committee on Foreign Investment.
The iconic Waldorf Astoria Hotel in downtown Manhattan – owned by a Chinese Company from a $2 Billion deal. Chinese investors are snagging other such “trophy properties” across the country in upscale areas.
Energy such as the oil fields in Texas, wind farms, telecommunications, high tech firms, even American infrastructure across the country are now under Chinese ownership. The Federal government believes that opening up America for foreign investment is a good thing and will help the struggling economies of both countries.
Chinese cyber hacking has increased. The investment into American companies allows them access to areas they once did not have.
From a U.S. Government document on Chinese investments and National security:
…The greatest potential impact on the United States could come in the form of Chinese investments in U.S. telecommunications companies. The vast global telecommunications and technology infrastructures owned or operated by these companies include undersea, terrestrial, wireless, and space-based networks. These investments would increase China’s leverage in the U.S. marketplace and beyond (even if indirectly through joint ventures and third parties) and could eventually provide China access to or control of vital U.S. and allied information, networks, or segments of critical supply chains.
The Permian Basin has enjoyed a revival as shale gas exploration and other drilling technology, such as fracking has improved. Borden and Howard counties are just two counties in a huge basin area of exploration, but I still don’t like the idea of China owning a piece of Texas, or any part of the US for that matter.
Tall City Exploration recently had a large infusion of money in the amount of $200 million from Denham Capital, an investment company that focuses mainly on oil and gas. Plymouth Petroleum is another LLC that acquires and develops oil and gas properties in the Permian Basin of west Texas and southeast New Mexico.
Each of these companies has other offshoots with half a dozen other holding companies, as do many oil exploration companies in the basin. Much of what they do is buy and sell properties and then lease it to other companies to work the fields. For my nickel, the bad guy in this scenario is the US Foreign Investment Committee for allowing China to buy up our property including the mineral rights. But I’d imagine their slice of the pie is substantial enough that they don’t care who owns it.
The Rhodium Group tracks Chinese acquisitions in the US and they’ve compiled this map that shows the purchases by state and in what industry. Click here to go to the interactive map on their site.