The U.S. and China are the world's largest energy importing countries. In 2011, both countries imported approximately half of their total oil supplies from overseas. Due to this great reliance on foreign energy supplies, energy companies from both countries continue to pursue energy outward direct investments (EODIs) as an approach to increase their access to global energy reserves. In this context, my study will compare and contrast the characteristics, current positions, and future trends of both the U.S. and Chinese EODIs — specifically their exploration and development investments. Based on the analysis of current U.S. and Chinese EODI positions, the study goes further to analyze their objectives and determinants, explaining both the similar and different aspects of EODI characteristics, positions and historical trends. By integrating the positions, objectives, and determinants of U.S. and Chinese EODIs into an interactive and dynamic mechanism, the study designs a partial equilibrium model system, in order to predict the future operational outcomes (production, sales, exploration, and profitability) and the competitive positions of U.S. and Chinese EODIs. However, the study's conclusions should be interpreted with caution, since the analysis is based on data and trends up to 2011, and in some cases up to 2008, 2009, and 2011. The major technological breakthroughs in the field, especially in hydraulic fracturing and horizontal drilling technologies, may affect future demand, lifting costs, and geographic locations of energy reserves, and thus may affect the prospects of EODIs in significant ways.
Table of Contents
Data and Methodology
Current Positions: China and the U.S. EODI status and historical trends
Determinants and Goals: Similarities and Differences between U.S. and Chinese EODIs
Competition in Perspective: A Partial Equilibrium Model of U.S.-Chinese EODI operations