"But China is also engaged in a carefully thought-out program of expanding its "soft power" in the region. If hard military power is deployed to coerce other countries to a nation-state's ends, soft power is designed to attract and persuade. It can take the form of cultural exchanges, education programs, foreign aid, diplomacy, business promotions, and involvement in international organisations."
China's oil majors are notching up big purchases by steering clear of controversy.
Sinopec's $2.5 billion deal to acquire an interest in Devon Energy Corp's shale fields, and Petrochina's $666 million purchase of Canadian oil sands from Athabasca Oil Sands Corp, have started the year with a bang. It's all a far cry from 2005, when China National Offshore Oil Company's failed bid for Unocal threatened to stop China's outbound energy acquisition in its tracks.
The latest wave of acquisitions by China's national oil companies shows that they have learned from past missteps. Where Cnooc's $18 billion bid tried to swallow Unocal whole, the national oil companies now target minority stakes and joint ventures that are less likely to ring alarm bells in Western capitals. Sinopec's latest deal is typical in this respect—giving it a one-third share of Devon's shale fields.
Targeting unconventional assets also helps. The image of China's state-owned giants siphoning off the crude from American wells raised fears about selling the farm to a strategic competitor. Squeezing the oil out of sands in Canada—as Petrochina will do following its purchase from Athabasca—may cause a stir in Alberta. But compared with the Unocal bid, China's new wave of purchases is less threatening.
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