"Night Dragon" sounds like a character out of "World of Warcraft." It actually is the name McAfee Inc. gave to a computer-hacking campaign apparently conducted from China, and it could have a big effect in the real world.
Cyber-espionage is a common enough occurrence. The difference with Night Dragon is that McAfee says it involved stealing bid documents and other sensitive information from global oil-and-gas companies.
Energy is a political hot spot, particularly when it comes to foreign acquisitions. Cnooc Ltd. famously lost the battle for Unocal in 2005, amid U.S. national-security concerns. Since then, Chinese acquirers have tended toward joint ventures instead, such as PetroChina's $5.4 billion deal with Canada's EnCana Corp., announced Wednesday.
Such deals present little actual threat to security. Spreading efficient drilling techniques in the global energy market helps open up new areas and keep a lid on prices. The problem is that regulatory decisions aren't immune to emotion. Episodes like Night Dragon stoke a general sense of unease about China's rise, coloring everything from rare-earth-metals markets to President Obama's "Sputnik moment" speech.
Chinese energy companies have been active buyers of global oil-and-gas assets, accounting for 12% of the market last year, according to IHS Herold. They could do without anything that regulators could use to justify blocking their bids.
What's more, if the hackers hoped to somehow give China's energy companies a competitive edge, such efforts look superfluous. Chinese state backing ensures the country's energy majors enjoy a low cost of capital when they bid for assets anyway. A percentage point or two off the hurdle rate trumps most things when it comes to winning a bid battle.
