China Foothold in U.S. Energy

Fu Chengyu's first attempt to buy a piece of the U.S. oil industry kicked up a storm of protest and ended in failure. Seven years later, the Chinese executive is pouring billions of dollars into the oil patch without even a whisper of trouble.

His new recipe for success: Seek minority stakes, play a passive role and, in a nod to U.S. regulators, keep Chinese personnel at arm's length from advanced U.S. technology.

Since 2010, Chinese companies have invested more than $17 billion into oil and gas deals in the U.S. and Canada, according to data provider Dealogic, giving their energy-thirsty nation a long-coveted foothold in a region known for innovative new drilling techniques. North America has become China's top region for oil and gas deals. Mr. Fu has been leading the push, first as chairman of China National Offshore Oil Corp., known as Cnooc, then as chairman of China Petrochemical Corp., called Sinopec, one of the largest oil companies in the world.

The recent deals are nothing like Mr. Fu's audacious, unsuccessful bid for Unocal Corp. in 2005. They typically involve a Chinese firm paying upfront for a stake in an oil or gas field and agreeing to cover some drilling costs. Cnooc executives figured such joint ventures "might be a nonthreatening way to get back into America," says Aubrey McClendon, chief executive of Chesapeake Energy Corp., who struck a 2010 deal with Mr. Fu that marked the beginning of the Chinese investment surge.

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