Have the Chinese National Oil Companies Paid Too Much in Overseas Asset Acquisitions?

This paper provides both a quantitative and qualitative analysis of whether the Chinese national oil companies have “overpaid” than their international counterparts in overseas asset acquisitions during 2001–2017. Using a hedonic pricing framework, we find that while the Chinese companies did not pay more than international oil companies for the period of 2001–2008, there is statistically significant evidence that they overpaid during the 2009–2016 period. A counterfactual analysis was conducted to quantify the extent of the overpayment. Interviews and qualitative analysis suggest that the overpayment mainly results from a rush to gain projects in a period of high oil prices and easier bank loans after the global financial crisis rather than concerns about energy security or other political considerations.