Asian Oil Companies Are Shopping in Your State

If you consider the world's energy circumstances, we appear to have entered a perfect storm, to resurrect an admittedly shopworn metaphor.

We're now faced with a daunting nexus of rapidly expanding populations in the developing countries, Japan's nuclear difficulties, lingering effects from BP's (NYSE: BP) Gulf spill, and political turmoil in the Middle East and North Africa. As a result, Asian governments appear to be becoming quick-draw artists as they reach for their wallets. The stash they latch onto frequently funds traditional energy plays, often in the West.

Korea National Oil Corp., South Korea's state-owned energy company, began this week by agreeing to hand over $1.55 billion to Anadarko Petroleum (NYSE: APC) for a stake in a shale-oil block in Texas. From a U.S. size perspective, the deal follows only mining giant BHP Billiton's (NYSE: BHP) recent $4.75 billion bid for Chesapeake Energy's (NYSE: CHK) Fayetteville Shale assets this year.

The stake being acquired by KNOC includes about 80,000 net acres in the progressively more active Eagle Ford Shale, in an area where 75% of the production is in oil, along with 16,000 gas-producing acres in the Pearsall Shale. Under the terms of the deal, KNOC won't pay cash up front, but in exchange for 23.67% of the new venture, it will fund 100% of Anadarko's 2011 capital costs, followed by 90% in 2012.

The Korean company has indicated that it will spend as much as $4 billion internationally on oilfields this year, with the objective of raising its daily production by about 60,000 barrels to 240,000. Rather than buying companies, however, it expects its acquisition strategy will now slant toward purchases of fields.

KNOC's deal with Anadarko occurs virtually in tandem with its $515 million agreement involving the acquisition of 95% of Altius Holdings Inc., the Kazakh arm of Geneva-based commodity trader Vitol Group. That purchase involves four oil blocks in Kazakhstan, likely with reserves of about 57 million barrels.

From Anadarko's perspective, the KNOC venture adds to an emerging string of deals designed to fund its drilling and development costs by sharing a portion of its acreage with Asian companies. Last year, it sold $1.5 billion of northeastern U.S. assets to Japan's Mitsui & Co. in exchange for drilling and development funding.

Other Asian companies are also anteing up for Western oil and gas properties. China, for instance, has halted approvals for nuclear plants, clearly signaling increased fossil fuel demand. Last month, PetroChina (NYSE: PTR) took down a $5.4 billion stake in Encana's (NYSE: ECA) Cutback Ridge shale-gas assets. And early last year, the company acquired a 60% stake in Canada's Athabasca Oil Sands Corp.'s MacKay River and Dover oil-sands projects for $1.9 billion.

I don't know how far this buying spree by our friends across the ocean will go. No one does. Nevertheless, as one with a penchant for both geopolitics and energy, I'd counsel my Foolish friends that ignoring PetroChina in particular could be tantamount to missing a large and fast-moving boat.