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Tuesday, February 01, 2011

China Pays $570 Million for One-Third of US Firm Chesapeake Energy

Told you there would do it.

Hey folks

Happy Tuesday to you. As I have been telling you, China has overtaken the US in demand for Oil and Natural Gas. SO? Instead of going "Green," or limiting their own Oil and Natural Gas Production, they are INCREASING their own supply. Since people like Chesapeake Energy are finding it difficult to pay to jump through all the hoops and blocks that Obama and Crew have put into place, they {China} look like a very economical alternative. Sell off a third to China, let them deal with it. They don't have to. NO. I'm sure this has nothing to do with US Energy Secretary being Steven Chu. {Smile} I said this.

I told you about China, stepping in and buying up a third of the Shale Project in Texas from Chesapeake Energy. Why? Because Chesapeake Energy found it cost preventive, to jump through all the Hoops that Obama and Crew have put into place, just to get permission to START. Due to regulations, fines, and taxes, this Administration has accomplished what it wants to accomplish. Moratorium De Facto Still In Place.

So why is China doing this? Is it because they are greedy? Because they hate the planet? Is it because they are against the "Green Dream?" No. According to
Reuters -
China overtakes U.S. as biggest energy consumer: IEA

Well, it has happened. According to the AFP - China's CNOOC buys stake in US energy project
BEIJING — China's CNOOC Ltd said Monday it has agreed to pay $570 million for one-third of US firm Chesapeake Energy's shale oil and gas drilling project in the American states of Colorado and Wyoming.

The investment in the 800,000-acre (323,749-hectare) project in two basins is the second deal between the firms since October and signals greater efforts by both energy-guzzling countries to develop the hard-to-reach resources.
And cut through all the absurd Red Tape and Blocks put into place. So instead of us using our OWN resources, we have China buying interest, and yes, that means THEY will be acquiring OUR Resources, from US Land, for THEIR use. They will not have to pay us for it. WE LOSE. They Profit. {Sigh}
CNOOC's wholly owned subsidiary CNOOC International would buy the 33.3 percent stake, the Chinese company said on its website. In addition, it will fund two-thirds of the drilling costs up to $697 million.

"It is a great pleasure to establish further cooperation with Chesapeake in shale oil and gas development," said CNOOC chairman Fu Chengyu.

"The project highlights the joint interests of energy companies in both US and China to accelerate the development of shale oil and gas, increase energy supply and reduce greenhouse gas emissions."
It will not reduce the non-existent "Greenhouse Gases." Not according to the Environuts. Oh, wait. There is none unless it is the US drilling. Anyone else is OK. Just like the Moratorium in the Gulf. We are not Drilling, but everyone else is and increasing their Drilling. But because WE are not, somehow we are safer? As I said before:

This is really not that hard to understand Their Energy Demands increase, they are looking to increase their Supply. They need to to keep Energy affordable for all of THEIR people. Since WE WON'T, they, and others, WILL. Then we will have to rely more on them, for our own product. I LOVE this piece from Investors Business Daily - China's Will To Drill

This is not an isolated incident. It IS a growing trend.
Chesapeake announced in October it had reached a deal with CNOOC to sell about a third of its interest in the Eagle Ford Shale project in South Texas for $1.08 billion.

Chief executive of the Oklahoma-based company, Aubrey McClendon, said the latest deal would "provide the capital necessary to accelerate drilling" in the project in northeast Colorado and southeast Wyoming and create thousands of jobs.

Shale gas comes from deep reserves that were thought inaccessible until the advent of new drilling methods. But costs still are usually above conventional gas, and some environmentalists worry about pollution in drinking water.

Chinese companies are investing in resources from Australia to Africa to Latin America as Beijing tries to secure access to raw materials needed to fuel the fast-growing economy.
So basically, read this one part again. "some environmentalists worry about pollution in drinking water." That is one of the driving forces behind these companies selling off to foreign Companies. Foreign Companies follow different and less restrictive rules and regulations. They are exempt from a lot of the "Enforcement" methods. They, like us, are experts on what they do, yet THEY are not being told by our Government, "we know better than you."

So there you have it folks, WE are giving up more and more control of, use of, and profit from, our own resources. Imagine if the Government would just get out of way, and let US be US. Let OUR companies do what they do best. Let US use our OWN resources? Like paying $3.00, $4.00, or even $5.00 a gallon for gas? Knowing the whole time that others are increasing their own supply, which will lower THEIR costs? Thank Obama.

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