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Most of their $160-billion-plus worth of M&A during the past two decades has destroyed rather than added to shareholder value, Bernstein analysts including Neil Beveridge said in a report Wednesday. The likely next targets for acquisitive Chinese majors include European exploration and production companies and assets in Russia, Brazil and Africa, they said.

China’s biggest offshore producer Cnooc Ltd. is among the three companies that have dominated the buying that started in 1997, including its $15-billion purchase of Nexen Energy in 2013, the nation’s largest oil and gas deal. More recently, CEFC China Energy Co. purchased a minority stake in Russia’s Rosneft PJSC for about $9 billion.

“After a period of inactivity, we expect M&A activity to increase,” Bernstein analysts said in the report. “Unlike previous cycles, M&A will be more disciplined and hopefully more value orientated.”

Assuming oil prices at $65/bbl, Chinese companies have lost about $23 billion in value through outbound M&A, according to Bernstein’s analysis, which uses purchase price, remaining net-present value and free cash flow. That estimate also ignores 14 Bboe in undeveloped resources.

Brent crude, the global benchmark, has averaged about $54/bbl this year.

Biggest losers

While Cnooc has overall added value, PetroChina Co. and China Petroleum & Chemical Corp., known as Sinopec, have eroded it, Bernstein said. Sinopec’s Repsol assets in Brazil and onshore assets in Argentina were among the worst deals, according to the analysis.

The best value came from Cnooc’s purchase of South Atlantic Petroleum Ltd. While the Nexen deal loses value with oil at $65/bbl, it would generate $6 billion at $85, the analysts said.

“Given fears of energy security, the perceived wisdom is that Chinese companies are buying resources to make up for the deficiency in domestic oil and gas reserves,” the analysts said. “As such, many investors see outbound M&A as a form of national service, which is largely wasteful.”