China has become the largest crude oil operator in the North Sea despite boasting that it uses deep-water oilrigs as strategic weapons. The scale of Chinese growth in the region meant that Britain handed about £2 billion in tax breaks to one state-run oil company last year, analysis by The Times has shown. China National Offshore Oil Corporation (Cnooc), which is controlled by the Communist Party in Beijing, runs two of the North Sea’s biggest oilfields. Nexen, a Cnooc-owned company, is responsible for extracting almost 200,000 barrels a day in the area, more than 10 per cent of output. China has moved to dominate British oil production in what one expert described as an exercise in “soft power” as Beijing expands its global role. The strategy has been pursued despite a slump in the price of crude oil from about $115 a barrel in 2014 to $50 today. Security experts have already raised concerns about China’s interest in Britain’s energy infrastructure. Last month it was revealed that China General Nuclear Power (CGN), the partner in the £18 billion Hinkley Point nuclear power station deal, was facing nuclear espionage charges in the US. Cnooc and CGN are both majority owned by China’s Assets Supervision and Administration Commission, which is under the “direct control” of the State Council, referred to as Beijing’s highest government authority. CGN’s board of directors comprises members of the Communist Party of China, US legal documents say. A decade ago Cnooc was blocked from buying a US oil company over national security concerns. No concerns appear to have been raised in Britain when the company bought Nexen, a Canadian oil operator with a large stake in North Sea oil, in 2012. Cnooc has also drawn criticism for its operations in the South China Sea, which China has claimed for itself despite an international tribunal ruling to the contrary.
Times 23rd Aug 2016 read more »