SHANGHAI (AFP) - China's global hunt for crucial energy supplies is taking it into America's backyard, with two Chinese state firms winning production rights to a multi-billion-barrel deepwater oil field off Brazil.
China National Petroleum Corp (CNPC) and China National Offshore Oil Corp (CNOOC) each took a 10 per cent stake in Brazil's "Libra" field, alongside three other companies, at an auction on Monday.
Beijing is seeking oil, natural gas and other raw materials to keep the world's second largest economy moving and the government has is encouraging companies to "go out" and make acquisitions to gain both market access and international experience.
"Everyone is scrambling for resources worldwide," said Ms Li Li, an analyst at consultancy C1 Energy.
"The whole of South America is relatively less developed with both abundant reserves and these kind of resources, so Chinese companies are more interested," she said.
China is already the biggest energy user in the world and the Organisation of Petroleum Exporting Countries (OPEC) says it could also surpass the United States as the largest oil importer by 2014.
The chief executive of CNOOC, China's main offshore oil producer, said the latest deal will allow entry to an "ultra" deepwater field.
"It also aligns with our philosophy of seeking partnerships to expand our global footprints," Mr Li Fanrong said in a statement.
CNOOC's traditional territory has been the South China Sea and East China Sea but last year it bought Canada's Nexen in a US$15 billion (S$18.6 billion) deal despite some Canadian political opposition.
Less than two months ago, another Chinese state firm, Sinopec, bought a US$3.1 billion stake in an existing oil and gas operation in Egypt - despite political strife in that country.
The Libra auction drew several participants but no US firms, who saw too many strings attached, including major Brazilian government intervention through its Petrobras company.
Ms Li Li played down the geographical proximity of the Libra field to the US, but acknowledged there was competition for energy resources.
"Chinese firms have a late start, so they must seek new assets which are harder to evaluate," she said.
Petrobras took a 40 per cent stake in the field, while Anglo-Dutch giant Royal Dutch Shell and France's Total each grabbed 20 per cent.
China already does significant business with Brazil, being a major buyer of its soybeans to feed its more than 1.3 billion strong population.
The two countries recorded US$85.72 billion in bilateral trade last year, up 1.8 per cent on 2011, making Brazil China's 10th-biggest trade partner.
For CNPC, China's largest oil and gas producer, the Libra deal comes at a time when the group and its listed unit are targets of a government probe into corruption - which they claim has not affected operations.
A former CNPC chairman, Mr Jiang Jiemin, is under investigation and has been removed as director of China's supervisory body for state-owned firms, state media said last month.
Four other executives of CNPC or subsidiary PetroChina are also under investigation, the companies and state media have said.
Stock investors were little moved by the Brazil venture. In Hong Kong trade CNOOC shares fell 0.63 per cent, while PetroChina edged up 0.66 per cent.
However, Shanghai-listed shares of PetroChina fell 0.51 per cent.