The mainland's oil ambitions know no bounds, judging from the flurry of mega deals in the past few months. The latest attempt by China National Petroleum Corp (CNPC), the mainland's biggest oil company, to purchase the majority interest in the Argentinian unit of Spanish energy giant Repsol-YPF for US$17 billion has raised more than a few eyebrows at home and abroad, particularly in the power corridors of Beijing, Madrid and Buenos Aires.
China National Offshore Oil Corp (CNOOC), the mainland's largest offshore oil company, is also reportedly interested in buying a stake of 25 per cent in YPF.
The bids, as first reported on Thursday by the South China Morning Post, are the latest signs of the mainland's aggressive strategy of sourcing and securing energy supplies worldwide to fuel its economic expansion.
As oil giants are racing against the clock and around the world to make these huge oil deals, mainland leaders should take a reality check and be sober-minded, not least because the high-profile and multibillion-US-dollar acquisitions risk political and social backlash against the mainland's overseas investments.
More important, those deals, if not thought through and handled properly, can pose subtle and sticky problems for the mainland's foreign-relations and geopolitical policies.
In other words, Beijing's leaders need to weigh political and commercial considerations very closely before allowing mainland companies to gobble up assets in foreign countries.
Until recent years, the mainland had a long tradition of placing politics over commercial considerations in approving outbound investments in foreign countries.
From the early 1950s to the late 1990s, the mainland's overseas investments, except for those in Hong Kong, were mainly aimed at currying political and diplomatic favours from Asian and African countries.
But Beijing's overseas investment policy started to shift significantly in the past few years, as the nation's double-digit economic expansion prompted leaders to map out a strategy of securing supplies of energy and raw materials abroad.
However, the first major attempt failed in 2005, when CNOOC pulled its US$18.5 billion bid for the American oil company Unocal after political opposition in Washington turned out to be much stronger than expected.
After oil prices soared to nearly US$150 a barrel before the onset of the global economic crisis last year, Beijing stepped up efforts to secure energy supplies, including a series of oil-for-loans agreements with such oil-rich countries as Russia, Brazil, Venezuela and Kazakhstan.
Chinese oil companies are also racing to clinch oil deals as the window of opportunities is closing. That is because the number of potential targets is getting smaller as the oil price has stabilised around US$70 in recent weeks and many companies may be less willing to sell amid improving credit markets.
Last week, CNPC won a bid with BP to help boost the output in Iraq's largest oilfield. That came after Sinopec's US$7.2 billion successful bid last month for Addax Petroleum, which has oil assets in Africa and Iraq.
But commercial considerations should not be the only factor for mainland leaders to weigh, particularly in the case of Repsol's Argentinian unit.
First of all, the reports that two of China's biggest oil companies are in talks with Repsol at the same time, though for different assets, can be disconcerting and can be seen as overly aggressive to many in Madrid and Buenos Aires.
Second, the talks came at a particularly sensitive time in Argentinian politics as the present administration, under President Cristina Fernandez de Kirchner, is undertaking what is termed a 'creeping nationalisation programme'.
The Argentinian government could be forced into a difficult position, as it needs to weigh its own national priorities and its important relations with China.
Mainland leaders should learn a lesson from China Aluminum Corp's recent US$19.5 billion failed bid to get a stake of Australia's Rio Tinto.
Earlier this year, the mainland conglomerate was one of several mainland companies doing deals in Australia at the same time, triggering intense scrutiny from Australian media and opposition politicians. This naturally put Putonghua-speaking Australian Prime Minister Kevin Rudd in a very difficult position.
Third, the fact that the two companies are talking to Repsol at the same time indicates a lack of a co-ordinated strategy on the Chinese side. That is surprising and disconcerting, given the fact that deals of this size are most likely to involve approval from mainland regulators, including the powerful National Development and Reform Commission.
What are the officials thinking? It is time that they sober up.