With the oil price dropping as much as it has over the past nine months, one would expect China’s state-run oil giants to go on a shopping spree abroad. China’s so-called big three oil companies — China National Petroleum Corp. (CNPC), China Petroleum & Chemical Corp. (Sinopec) and China National Offshore Oil Corp. (CNOOC) — have been big buyers of international oil assets in previous years, driven by China’s swelling hunger for energy. Now they’ve suddenly put away their wallets, falling in line with an industry that has produced few noteworthy mergers and acquisitions since prices started plummeting in 2014, aside from BG Group PLC’s $70-billion merger with Royal Dutch Shell PLC in April.
Why is Chinese big oil staying silent? To find out, China Real Time interviewed Chen Weidong, the chief energy researcher of the Energy Economics Institute at CNOOC, who writes on the oil industry for The Wall Street Journal’s Chinese website. Here are excerpts, edited for brevity and clarity:
How big a role has Chinese big oil traditionally played in international M&A?
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