China Gearing Up to Drill for Oil in U.S. Territory in the Gulf of Mexico?

~~By InsightAnalytical-GRL

Back in the beginning of the year we noted how the Chinese were expanding their influence by buying all sorts of resource companies around the globe, including sources of oil. (See: The Past Week: February 22-28, 2009 (Laura Bush Lives On; Budget Director Peter Orszag/Robert E. Rubin, Iceland Bankrupters; China Taking Advantage of U.S. Weakness As It Looks to Buy Foreign Oil Companies?; U.S. Deaths Spike in Afghanistan; Baracus Caesar Obamacus Meets Barackistanis).

A few years ago the U.S. was able to rebuff a move to by China to buy Unocal. But things have changed dramatically we now can see how our poor financial situation is affecting our ability to handle outside economic threats…and security. According to the LA Times:

China’s push for oil in Gulf of Mexico puts U.S. in awkward spot

A Chinese company’s gambit to drill for oil in U.S. territory demonstrates China’s determination to lock up the raw materials it needs to sustain its rapid growth, wherever those resources lie.

The state-owned China National Offshore Oil Corp., or CNOOC, reportedly is negotiating the purchase of leases owned by the Norwegian StatoilHydro in U.S. waters in the Gulf of Mexico, the source of about a quarter of U.S. crude oil production.

China’s push to enter U.S. turf comes four years after CNOOC’s $18.5-billion bid to buy Unocal Corp. was scuttled by Congress on national security grounds. The El Segundo oil firm eventually merged with Chevron Corp. of San Ramon.

There is some question about what will happen this time around. The speculation in the piece is that due to our economy and the need for cooperation between the U.S.and China, there may not be any real backlash to the current deal.

In addition, since the U.S. has welcomed oil investments in the Gulf of Mexico from other foreign companies, such as Britain’s BP, Brazil’s Petrobras, France’s Total and Shell (Dutch), as well as others, saying “no” to the Chinese may get a little sticky.

But most serious are  the foreign policy implications of China’s moves:

The U.S. risks undercutting its foreign policy goals as well. Concern is growing over China’s aggressive investment in oil-rich nations with anti-U.S. regimes, including Iran and Sudan. Denying China a shot at drilling in U.S. waters would only encourage Beijing to make deals in volatile regions given that new oil reserves in stable, democratic nations are getting harder to find.

more

Gee, do you get the feeling that things are closing in on us a bit?

Will Congress have any response?  Will there be any leadership from the Obama Administration?  What will Hillary Clinton be thinking and how much leeway will she have in dealing with the situation?  Or will she be ordered to sit on her hands?

Time will tell…