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China vs. The Rest: A New Era of Global Energy Dealmaking

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  • Qiangyu Wang
  • Gavin Kretzschmar

Abstract

China’s recent global energy policy suggests an acquisitive attitude to deal-making, coming as it does fourteen years after a failed high profile 2005 bid for the U.S. giant Unocal. Our study of 726 global oil and gas mergers and acquisitions for the period 2006 to 2012 reveals that by entering risky oil regions, China is executing deals globally and doing them (relatively) well. By median, Chinese state backed energy giants paid 6.5 percent less than comparable energy dealmakers. Findings suggest that by undertaking deals in risky countries, typically those with high trade barriers to entry and significant political risk, China achieves observably more favourable deal pricing terms, achieving acquisitions at significant discount.

Suggested Citation

  • Qiangyu Wang & Gavin Kretzschmar, 2019. "China vs. The Rest: A New Era of Global Energy Dealmaking," The Energy Journal, , vol. 40(1_suppl), pages 297-316, June.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:1_suppl:p:297-316
    DOI: 10.5547/01956574.40.SI1.qwan
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    References listed on IDEAS

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    1. Li, Raymond & Leung, Guy C.K., 2011. "The integration of China into the world crude oil market since 1998," Energy Policy, Elsevier, vol. 39(9), pages 5159-5166, September.
    2. Xiaoyi Mu & Haichun Ye, 2011. "Understanding the Crude Oil Price: How Important Is the China Factor?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 69-92.
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