The prospect of Chinese and Indian oil companies buying oil and gas-producing assets in the US and Russia is changing the landscape in which the western oil majors operate.
In a further sign of China's and India's aggressive pursuit of energy supplies, India signed last week a $40bn deal with Iran to import liquefied natural gas and join in developing three Iranian oilfields.
The deal follows reports that the China National Offshore Oil Corporation (CNOOC) is eyeing a $13bn takeover of Unocal, the US listed oil and gas producer, and that India's Oil and Natural Gas Corp was in talks with Russia about buying some of the assets of Yukos.
"These are the new strong players in the oil industry and they will provide very stiff competition to the majors," said Leo Drollas, deputy chief executive at the Centre for Global Energy Studies.
The Iranian gas accord follows last year's $70bn deal for China's Sinopec to take 250m tonnes of LNG over 30 years and a 50 per cent stake in the Yadavaran oilfield.
The growing ambitions of the Indian and Chinese oil companies will catch the eye of policymakers in the west.
However, Gary Ross, of PIRA Energy Group in New York, said: "This is a private transaction - it has nothing to do with what the [Capitol] Hill thinks ... It will have more of an impact on the major oil companies because [CNOOC] is a government-sponsored company and is willing to accept lower rates of return than they will. They won't be able to compete when bidding for assets."
Rob Arnott, senior research fellow at the Oxford Institute for Energy Studies in the UK, said CNOOC's move was part of the growing trend over the past two years of Chinese energy companies aggressively pursuing international oil-producing assets.
If the Unocal acquisition was to proceed, it would be the largest overseas acquisition by a Chinese company and would come as China's largest oil companies -- China National Petroleum Corp, Sinopec and CNOOC have been busy snapping up oil production assets around the globe in an effort to attain "security of supply" as the country's oil demand and imports expand rapidly.
Drollas said the rationale for "security of supply" was redundant as no country could be immune from a significant disruption to global oil production.
"The Japanese have tried to develop a 'security of supply' policy for decades, but it has not worked. Now the Chinese are developing one, but they will fail too because the market is international where everybody is affected if prices go up," said Drollas.
He said the Chinese approach contrasted with that of Japan, which is in the process of disbanding the Japan National Oil Company, its state-run company, after its large investments in overseas oil exploration yielded few new oilfields.
"I think [any CNOOC move] is quite smart. They have obviously looked at the whole energy market and looked at the lack of success with the Japanese exploration strategy and decided the best way to buy supply was through a takeover of a private company," said Drollas.
Analysts said a key attraction for CNOOC was that Unocal had 70 per cent of its production assets in the Asian region, with its single largest asset, its interests in the Azeri-Chirag-Gunashli field in the Caspian Sea and the adjoining Baku Tbilisi Ceyhan pipeline.