DealZone

AIGs exit plan with the government is good for the company but  taxpayers may not be getting an equally good deal, writes columnist Richard Beales. *View column *View graphic *View WSJ report on how the exit plan was formed

Chinese refiner Sinopec will buy 40 percent of Repsol’s Brazilian arm for $7.1 billion. *View article *View factbox on China’s M&A activity

“Tucked away in a basement in London’s exclusive Mayfair district is a hedge fund manager investing entirely in raw materials, one of a small band trading commodity spreads and making big money in the process,” writes Christopher Johnson and Joe Brock. *View analysis

Private equity has experienced a comeback, but some issues will need to be addressed to maintain the momentum, writes The New York Times. *View NYT article

Deutsche Bank analyst Paul Sankey says the U.S. oil major may overshoot its $10 billion target for asset sale by 50 percent. He reinstated coverage of ConocoPhillips with a “buy” rating, crediting the rising premiums the company has been able to command. So far, Conoco has raised more than $5 billion from the sale of stakes in its Canadian oil sands venture, Syncrude, to China’s Sinopec and the stake in a truck stop joint venture to Pilot Travel Centers.

Sankey expects about $1.5 billion to $2 billion from Conoco’s North American assets, including $1 billion from its 25 percent interest in the Rockies Express pipeline. This would bring the total asset sale proceeds to about $7 billion this year — well ahead of the company’s target of $5 billion, he said.

Conoco has been selling to cut its spiraling debt. That may not be as dramatic an incentive as what is going on in the Gulf, but could mean BP may tap into the same demand for oil and gas assets to pay for its clean-up efforts. If you believe the forward price curve for oil, buying assets now may be the best chance to prepare for the coming price increases.

Having the engine of cheap exports able to secure oil and other resources can’t be bad for firing up global economic recovery. So Sinopec‘s purchase of Swiss oil explorer Addax Petroleum — China’s biggest overseas acquisition — should be an encouraging event.

Addax brings high-potential oil blocks in West Africa and Iraq. These are areas that tend to present difficulties for Western oil companies, so the deal exposes gaps that big emerging powers such as China, India and South Korea are looking to exploit. Certainly, these corners of the world are less politically perilous for the People’s Republic than the United States, where local politicians blocked CNOOC’s $18.5 billion bid for oil company Unocal in 2005.

Is it too convoluted to suggest that the bad blood still dripping from the failed Unocal bid might wind up being the grease that gets a world of other deals done for China?