An invasion of U.S. oil fields by Asian buyers is happening. Recently, companies from Korea, China and India have bought land in the oil-rich states of Texas, Colorado and Wyoming, according to Reuters.
In one of the biggest land deals, Korea National Oil (KNOC) bought one-third of Anadarko Petroleum's (APC) land holdings in South Texas for $1.55 billion. The purchase of 80,000 acres is located in the Eagle Ford Shale section, which is believed to have rich deposits of oil, natural gas and liquids, according to Reuters. KNOC also will receive 16,000 acres in the Pearsall Shale in South Texas.
China's CNOOC purchased $1.3 billion of oil and shale land in Colorado and the Southwest, Reuters added, and according to Barclays (BCS), India's Reliance RELI paid $11,354 per acre for land purchased from Pioneer Natural Resources (PXD).
The Anadarko deal is unusual in that the company will receive no cash. Instead, KNOC will pay all of Anadarko's capital costs for 2011 and continue paying them until the money runs out, according to Reuters. One way to obtain development capital always has been to sell off part of your land.
Asian buyers are in need of our technology for extracting oil and natural gas from shale. In the case of the Anadarko purchase, KNOC will be working side by side with Anadarko.
A key question arises from these transactions. Our multinational oil giants scour the globe looking for new sources of energy. They make deals with foreign companies and governments to explore, extract and sell their products all over the world. Should we reciprocate? Should we allow foreign oil companies to invade our oil fields, to explore and extract our natural resources for their benefit?
The United States is an importer of oil. Should our government allow oil companies to sell off oil rich lands to foreign companies? Are we allowing foreign oil companies to deplete our oil fields? Should Congress step in an stop this? When the Alaska pipeline was built, Congress forbid oil companies from exporting our oil to other countries. Later, during the Clinton administration when oil was $10 per barrel, that restriction was lifted. Now oil is over $100 per barrel. Gasoline is nearing $4.00 per barrel. This should be a wake up call to Congress.