BUENOS AIRES, March 15 (UPI) -- China has taken the first major step toward securing an energy foothold in Latin America with the purchase of a 50 percent stake in Argentinian oil firm Bridas Corporation.
China National Offshore Oil Corporation said it would pay $3.1 billion for a 50 percent stake in Bridas, which is controlled by Argentine businessman Carlos Bulgheroni and has oil assets in Argentina, Chile and Bolivia.
The CNOOC acquisition in Argentina comes after many months of Chinese exploratory visits and negotiations in Latin America. Analysts said the purchase was in line with the Chinese government strategy to secure energy assets abroad as a cushion against China's rising demand and as a future source of revenue.
With crude oil at more than $80 a barrel, the purchase signals the start of formal Chinese entry into the Latin American energy market, after similar approaches made to acquire metals and raw materials to feed the Chinese industry's growing demand.
CNOOC President Yang Hua said Bridas represents "a very good beachhead for us to enter Latin America" and a culmination of efforts begun last year to secure that position.
With galloping industrial growth and rising consumption among the country's newly rich, China has become the world's second largest energy consumer, after the United States.
The Argentine deal is the largest single CNOOC transaction since the company paid $2.7 billion for a stake in a Nigerian oil field nearly five years ago.
In between China has been buying energy assets in Asia and Africa. Industry estimates suggest China spent about $13 billion on energy asset buying worldwide in the past two years. However, most of the buying involved canny scrutiny of the assets, with an eye on securing not only the best possible deal but also assurance of energy supplies for the coming generations.
The Bridas buyout will add 318 million barrels, an increase of about 12 percent, in CNOOC reserves and boost its average daily production by 46,000 barrels.
Bridas owns a 40 percent stake in Pan American Energy LLC, Argentina's largest crude oil exporter and has oil and gas reserves in Chile and Bolivia. BP Plc, Europe's largest oil company, owns the remainder of Pan American shares.
Demand for oil in China rose 28 percent in January compared with the same month a year earlier, the International Energy Agency in Paris said. The agency called the rise "astonishing," indicating information from China's energy industry was still threadbare in some areas.
