I heard two interesting oil stories from last week’s US visit.
First, Libya has rejected a $417 million bid by China National Petroleum Company (CNPC) for Verenex, a Canadian oil-exploration company with Libyan oil leases. Libya’s national company has since purchased Verenex at 30% less than CNPC’s offer price. I’m not sure if Libya’s response was specific to China itself, or a de-facto attempt to nationalize some of its oil assets. But the response is interesting given that Libya, alongside Algeria, is one of few countries in the Middle East to receive large numbers of Chinese workers. In fact, I heard from a Libyan central bank official in June that 6,000 Chinese workers had applied for visas in the previous month alone. And I wouldn’t be surprised if this has caused some friction.
Second, Iraq may blacklist China’s Sinopec for its purchase of the Geneva-based oil-exploration company Addax, which owns several licenses directly issued by the Kurdish Regional Government. The licenses are in breach of an Iraqi law requiring all oil deals are made in Baghdad.
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