Thursday, August 04, 2005
LexisNexis(TM) Academic - Document
Herald Sun (Melbourne, Australia)
August 4, 2005 Thursday
SECTION: BUSINESS; Pg. 35
LENGTH: 821 words
HEADLINE: Can we say 'no' to China?
BYLINE: TERRY MCCRANN
BODY:
IF WE WOULDN'T LET SHELL BUY WOODSIDE, WHY WOULD WE LET CHINA?
WHAT if China came knock, knock, knocking on Woodside Petroleum's door? Indeed, perhaps that question should be phrased as 'when' not 'if'?
It would pose delicate, even delicious questions in business terms; in foreign investment terms; and on the geopolitical front.
Woodside is our single biggest corporate oil and gas resource. It is also 'available' after the Federal Government prohibited its full acquisition by its biggest shareholder Shell.
It's acquisition by a cash-rich energy-hungry China would seem an absolute no-brainer. So what would 'we' say, if an approach was made?
Yesterday the Chinese Government-controlled oil group CNOOC abandoned its attempt to buy the big US oil group Unocal.
Interestingly, with Woodside capitalised at a tad over $20 billion, any bid for it would cost pretty much the same as the $23 billion CNOOC had been offering for Unocal.
The Unocal bid made three very significant statements. That China was prepared to spend some of the cash garnered from its continuing huge trade surpluses.
It was prepared to play with the big boys of western capitalism -- indeed, the very big boys -- by making a hostile takeover bid for a major publicly listed company.
And thirdly, and crucially so far as Woodside is concerned, it wants to buy oil assets; and is prepared to buy them at these record high prices.
That's to say, it knows exactly what it wants and it knows exactly what price it will have to pay. On the basis that whatever happens in its own economy and the world's, the demand for oil and gas is only going to keep going up. Along with the price.
Now Woodside is a very different company to Unocal. Its value lies in gas resources, owned via joint ventures and already mostly pledged to a range of buyers including China.
In some ways, that mix could be even more attractive to China than a conventional US-based oil company -- which is hostage to the political, energy and economic dynamics of that country.
So why hasn't there been a move on Woodside? The answer might be as prosaic as an assumption that Woodside is 'not for sale'.
Because of Shell's dominant 34 per cent shareholding, and the Australian Government's rejection of the Shell bid for the rest.
If we wouldn't let Shell buy Woodside, why would we let China? That in itself raises some tantalising, even tricky political questions.
We wouldn't let Shell buy the rest precisely because Shell was a global oil major.
Setting aside the persuasiveness of Woodside chairman Charles Goode, essentially the concern was that Shell would 'mothball' Woodside-controlled resources to enable other Shell resources to proceed first.
That would certainly not be an issue if energy-hungry China was the buyer. Presumably it would want to fast-track resources it had paid $20 billion or more to buy.
While we were worried about Shell leaving the resources in the ground, would we be wildly enthusiastic about China pumping them out -- but then shipping them far away?
But would Shell sell? Letting Woodside fall to China might seem fundamentally counter-intuitive. If Shell wanted Woodside in order to control development of its resource base, why would it sell to the one buyer that would go gangbusters on development?
Maybe, because it might work to build a more productive relationship with the country that is going to become the world's biggest energy buyer through the 21st century.
What about the politics? CNOOC's bid for Unocal unleashed a storm of protest in the US Congress. Would it be warmly welcomed in Canberra?
It's hard to see how the Government could reasonably reject a bid from China. The grounds used to reject Shell would work to directly endorse an energy-hungry buyer. And a buyer that would want to retain and grow Woodside's skills base and exploration dynamic.
John Howard took great credit for the $25 billion Woodside-led gas contract with China. It would be hard for him to say they could buy the gas but not the gas producer.
BP gone green
WE THOUGHT we had to beware of Shell coming bearing gifts; we should be warier of its fellow British sister BP pretending to do something similar.
BP has well and truly 'gone on the -- greenhouse -- wagon'. Behaving like a reformed carbon drunk, it's urging everyone to renounce the evil Big-C.
In corporate terms, this is known as getting on the front foot. You pump a lot of hydro-carbon, so you shout from the rooftops how evil it is, and how much investment you are putting into the sun keeping on shining.
Whether or not it proves a successful business strategy, only time will tell. But it's perfectly legitimate for management to propose and a board of directors to endorse.
But let's not pretend it's anything else. BP executives like to wander the world preaching the green gospel. That doesn't make them either green or preachers.
LOAD-DATE: August 3, 2005
August 4, 2005 Thursday
SECTION: BUSINESS; Pg. 35
LENGTH: 821 words
HEADLINE: Can we say 'no' to China?
BYLINE: TERRY MCCRANN
BODY:
IF WE WOULDN'T LET SHELL BUY WOODSIDE, WHY WOULD WE LET CHINA?
WHAT if China came knock, knock, knocking on Woodside Petroleum's door? Indeed, perhaps that question should be phrased as 'when' not 'if'?
It would pose delicate, even delicious questions in business terms; in foreign investment terms; and on the geopolitical front.
Woodside is our single biggest corporate oil and gas resource. It is also 'available' after the Federal Government prohibited its full acquisition by its biggest shareholder Shell.
It's acquisition by a cash-rich energy-hungry China would seem an absolute no-brainer. So what would 'we' say, if an approach was made?
Yesterday the Chinese Government-controlled oil group CNOOC abandoned its attempt to buy the big US oil group Unocal.
Interestingly, with Woodside capitalised at a tad over $20 billion, any bid for it would cost pretty much the same as the $23 billion CNOOC had been offering for Unocal.
The Unocal bid made three very significant statements. That China was prepared to spend some of the cash garnered from its continuing huge trade surpluses.
It was prepared to play with the big boys of western capitalism -- indeed, the very big boys -- by making a hostile takeover bid for a major publicly listed company.
And thirdly, and crucially so far as Woodside is concerned, it wants to buy oil assets; and is prepared to buy them at these record high prices.
That's to say, it knows exactly what it wants and it knows exactly what price it will have to pay. On the basis that whatever happens in its own economy and the world's, the demand for oil and gas is only going to keep going up. Along with the price.
Now Woodside is a very different company to Unocal. Its value lies in gas resources, owned via joint ventures and already mostly pledged to a range of buyers including China.
In some ways, that mix could be even more attractive to China than a conventional US-based oil company -- which is hostage to the political, energy and economic dynamics of that country.
So why hasn't there been a move on Woodside? The answer might be as prosaic as an assumption that Woodside is 'not for sale'.
Because of Shell's dominant 34 per cent shareholding, and the Australian Government's rejection of the Shell bid for the rest.
If we wouldn't let Shell buy Woodside, why would we let China? That in itself raises some tantalising, even tricky political questions.
We wouldn't let Shell buy the rest precisely because Shell was a global oil major.
Setting aside the persuasiveness of Woodside chairman Charles Goode, essentially the concern was that Shell would 'mothball' Woodside-controlled resources to enable other Shell resources to proceed first.
That would certainly not be an issue if energy-hungry China was the buyer. Presumably it would want to fast-track resources it had paid $20 billion or more to buy.
While we were worried about Shell leaving the resources in the ground, would we be wildly enthusiastic about China pumping them out -- but then shipping them far away?
But would Shell sell? Letting Woodside fall to China might seem fundamentally counter-intuitive. If Shell wanted Woodside in order to control development of its resource base, why would it sell to the one buyer that would go gangbusters on development?
Maybe, because it might work to build a more productive relationship with the country that is going to become the world's biggest energy buyer through the 21st century.
What about the politics? CNOOC's bid for Unocal unleashed a storm of protest in the US Congress. Would it be warmly welcomed in Canberra?
It's hard to see how the Government could reasonably reject a bid from China. The grounds used to reject Shell would work to directly endorse an energy-hungry buyer. And a buyer that would want to retain and grow Woodside's skills base and exploration dynamic.
John Howard took great credit for the $25 billion Woodside-led gas contract with China. It would be hard for him to say they could buy the gas but not the gas producer.
BP gone green
WE THOUGHT we had to beware of Shell coming bearing gifts; we should be warier of its fellow British sister BP pretending to do something similar.
BP has well and truly 'gone on the -- greenhouse -- wagon'. Behaving like a reformed carbon drunk, it's urging everyone to renounce the evil Big-C.
In corporate terms, this is known as getting on the front foot. You pump a lot of hydro-carbon, so you shout from the rooftops how evil it is, and how much investment you are putting into the sun keeping on shining.
Whether or not it proves a successful business strategy, only time will tell. But it's perfectly legitimate for management to propose and a board of directors to endorse.
But let's not pretend it's anything else. BP executives like to wander the world preaching the green gospel. That doesn't make them either green or preachers.
LOAD-DATE: August 3, 2005
# posted by Eastlaw @ 3:53 AM 
