From time to time along the years I have warned that Asia-Pacific and particularly Chinese interests are circling the North Sea, looking for opportunities; through oil and gas asset acquisitions, nice big contracts and takeover opportunities within the supply chain.
You have to be blind not to realise that it’s happening.
Just look at the deal Talisman did with Sinopec, all in the name of securing the funding needed to make headway in the North Sea, presumably because UK and other European financial institutions were too blind … too arrogant… to get on board.
Look at the manner in which Cosco has been mopping up orders … in particular for Sevan’s can-shaped drilling and production units, the latest of which is Dana Petroleum’s Western Isles FPSO, the build of which we are tracking in Energy.
Look at the acquisition of Canadian exploration and production company Nexen, thus giving CNOOC a strong grip in the North Sea; and I’ll warrant that’s just its UK Continental Shelf starter pack.
This is just the tip of a gigantic iceberg.
The Chinese have barely started and I believe the recent market report issued by the UK’s Energy Industries Council should be ringing alarm bells big-time in the corridors of political power … both London and Edinburgh.
Neil Golding, head of business research at the EIC told Energy Voice that “China’s a bit of an unknown.”
And: “What will be interesting to see is if they bring their supply chain with them. At the moment we’re just not sure if that will be the case.”
Come off it Neil; you instinctively know what the answer is.
A bunch of years ago I had the task of mentoring Robert Gordon University’s first Chinese MBA through her dissertation. The topic was the Chinese oil & gas supply chain and how its business model compared with the Western approach.
Tan Yi then went on to read for a PhD at RGU. She built on her earlier work. Her output was formidable and highly original. I played a small part in guiding her and I have a copy of her thesis as a reward.
Dr Tan and her work were pointedly ignored by the Department of Trade & Industry/UK Trade & Investment, despite my advocating that they should meet with her.
They weren’t interested in the fact that Aberdeen was and remains home to a Chinese national who then had and probably still possesses the most detailed knowledge of the Chinese oil and gas machine … especially its supply chain.
Back in the late 1990s, China’s national oil companies were supposed to disaggregate their supply chains. Or at least that was the plan. It never happened; indeed the integrated structure was if anything strengthened.
You can be sure that the big three … CNOOC, CNPC and Sinopec … will be biding their time a while yet before letting their supply chains loose in Europe. A flood-gate will be opened and likely sooner than later.
Far too much of the so-called UK oil and gas supply chain is in foreign hands … Energy columnist Dick Winchester is deeply worried about this.
And year by year even more falls into the hands of Johnny Foreigner while the banks and VCs stand idly by; or worse still, aid and abet.
I’m not at all happy with the outlook. The Chinese ARE HERE. And their critical mass will grow inexorably.
As for renewables in the UK, the same ghastly story is busily unfolding. I know; and first hand. It’s already largely in foreign operatorship and the indigenous but rudimentary supply chain doesn’t stand a chance.
Recommended for you
