China Drops $460 Million Bid For Libyan Oil Assets

petrochina china oil derricks

China’s quest to own all the world’s oil has run into resistance from Western governments that don’t want to be a pawn in the game. As a result China has largely focused on developing countries. That strategy has worked pretty well, but it hit a wall in Libya.

Dealbook is reporting that CNPC’s $460 million bid for the Libyan assets of Canadian oil producer Verenex Energy has fallen apart after the government in Libya objected to the deal:

Libya has shown itself to be a bit squeamish about foreigners selling domestic oil reserves to other foreigners that have not been approved by the state. More generally, China’s ambitions to acquire natural-resource companies around the world have some countries concerned about losing control of their own resources.

So far, much of the resistance has come from Western democracies that have ideological differences with China as well as a strong need for energy resources at home. By contrast, Libya is an authoritarian state and an oil exporter with a relatively small population.

The Libyan government is now expected to acquire Verenex’s Libyan assets at a lower price than what the Chinese were offering. Verenex’s shares tumbled 19 per cent on the news Wednesday.

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