Yantai Xinchao, a Chinese investment firm, has announced plans to buy Texas shale oil fields.
The $1.3 billion deal includes purchasing oil assets from Tall City Exploration and Plymouth Petroleum from oil fields located in Howard and Borden counties.
This is the second deal this year where Yantai Xinchao invested in Texas. In May, the company announced plans to pay about 2.2 billion yuan for another oilfield inCrosby, Texas, with proven reserves of about 25 million barrels
China's huge demand has Chinese oil and gas companies eyeing U.S. assets and analysts predict that we will see more of this activity as tough competition and tight government regulations back home put more pressure on Chinese energy industry. So far this year, the Chinese government has issued five import licenses to independent refineries to break the dominance of State-owned companies and create a more competitive and efficient energy sector.
In 2010, state-owned Chinese energy giant CNOOC bought 600,000 acres of oil and gas fields the Eagle Ford. Tom Pauken, former chairman of the Texas Workforce Commission, expressed concern about long-term effects of such deals on the U.S. economy and possible threats to Texas and warned against allowing the Chinese access to new, hard-earned U.S. technology.