With oil prices plunging through the floor, Texas oil companies could be at risk of being snapped up at bargain basement prices by China and other foreign countries.
FoxBusiness reports plunging prices have wreaked havoc on Texas oil companies struggling to avoid a wave of bankruptcies that has ravished the industry during the past five years, leaving them ripe takeover targets for rivals from China and elsewhere.
Ninety-eight exploration and production companies in Texas with $75.7 billion of debt filed for bankruptcy from 2015 through 2020, according to the international law firm Haynes and Boone.
That number is expected to grow even larger after West Texas Intermediate crude oil prices plunged 52 percent this year as stay-at-home orders designed to slow the spread of COVID-19 wiped out 30 million barrels per day of demand while Saudi Arabia and Russia ramped up production amid a price war.
The companies’ vulnerability to foreign buyers raises the risk that the U.S. might lose control over valuable oil-producing lands in the Permian Basin, a swath of land in western Texas and southeastern New Mexico that helped the country become the world’s largest crude producer amid a shale boom.
“We have discovered this volume of natural gas and oil that is more than any time in history,” said Wayne Christian, commissioner of the Texas Railroad Commission — the agency that regulates the state’s oil and gas industries.
“I believe it’s a national security concern to allow unfriendly foreign countries to come in and buy land and oil in Texas and the United States,” he told FOX Business.
A 2018 oil discovery in the Permian uncovered 46.3 billion barrels of crude, 281 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey.
The discovery effectively doubled America’s oil and gas reserves and puts the country on a path for years of energy independence. A separate estimate from RS Energy Group found the discovery could be as large as 230 billion barrels.