The Asian oil story continues to fill the M&A pipeline, and it is interesting to note that recent deals have seen Asian firms as buyers. PTTEP of Thailand struck first late last year with an investment in Indonesia's PT Medco. Then CNOOC bought Repsol's oilfields in Indonesia for $585 million.
Now PetroChina has bought six oil fields in Indonesia from a US firm for $216 million. The other foreign bidder was likewise an Asian company, Malaysia's Petronas.
PetroChina's CFO, Wang Guoliang has predicted this will be the first of many deals and few doubt that PetroChina has a large warchest. But will this be the first of many forays into Indonesia?
Certainly, Indonesia is keen for new investors to help develop its offshore fields, and one wonders how much of the recent conversations between Indonesia's and China's leaders during Megawati's visit to Beijing centred on this very subject. Obviously there is less political sensitivity when Chinese companies purchase assets in Asia - or less so than in other parts of the world. Think only of some of the bizarre statements that emerge from the US when Hutchison Whampoa bids for port operating contracts in places such as Panama, and members of Congress suggest an international Chinese conspiracy is at work.
This may explain why 'genuine' Chinese multinationals are making their first foreign forays within the region - where such a political backlash is less likely. Nor are they fools since they are taking advantage of attractive valuations in Indonesia.
Given that the Chinese oil companies have visions of becoming global champions, Indonesia will offer a close-to-home opportunity to diversify their upstream assets away from China and learn to operate abroad.
Goldman Sachs and Freshfields advised PetroChina.
For Indonesia, it is good to see that even if many others have little stomach for Indonesian political risk, at least the Chinese do.
Then again, Indonesia may not be the next stop for China's oil M&A, nor the most extreme example of absorbing political risk. After Jiang Zemin's successful trip to visit his 'old friend' Colonel Gadaffi and new agreements on Chinese exploration, maybe a Libyan takeover deal may be next on the cards. While it normally has a policy of following its clients, Goldman is not reckoned to have an office in Tripoli.