We have heard rumblings in recent days about Chinese oil giant CNOOC, ticker symbol CEO, possibly trumping ChevronTexaco's (CVX) $16 billion bid for Unocal (UCL). Today, of course, there was talk of dispelling those rumors. But make no mistake, China is aggressively searching for oil and oil assets, because as the old saying goes, "he who controls the oil....".
It maybe a bit too risky (in the court of public opinion) for the Chinese to jump in and attempt to out bid CVX for UCL. I wouldn't put it past them however. The Chinese have become neurotic in their quest to own oil assets. In fact, not owning a significant stake in oil assets is China's missing link to overtaking the US as the superpower of the world. The Chinese already control our country's long term interest rates, if they can capture significant oil assets, the ballgame will be over.
For those of you who are looking for the next takeover in the oil sector, keep an eye on Sunoco (SUN) and Marathon (MRO). I am not adding these stocks to my "Big Picture" portfolio because I do not speculate with long term money. For short term investors or speculators, I feel a takeover of SUN or MRO is probably a really good bet. Why ? Well, first and foremost is their refining businesses. Buying an existing refiner beats the time and expense of building a new refinery. Secondly, since demand will continue to rise, owning oil assets will be a very profitable business for years to come.
