With Cnooc Ltd.'s $15.1 billion deal in Canada, everyone is wondering: what's next in China's quest for energy?

According to a note by brokerage Sanford Berstein from March, Chinese oil companies' big acquisition appetite only really took off after the financial crisis, because they saw a "once in one hundred years opportunity" to take advantage of cheaper assets and reduced competition. Prior to that, deal sizes were much smaller.

Energy security is of course the key driver of these deals, but Chinese oil majors also want to learn from their Western counterparts and develop more sophisticated and diversified portfolios by acquiring more upstream assets, says Bernstein. With the Nexen Inc. deal, Cnooc will gain assets in the Gulf of Mexico and North Sea for the first time, for example. Another deal announced on Monday sees Sinopec, or China Petroleum & Chemical Corp., enter the North Sea through its purchase of a 49% stake in Canada's Talisman's Energy Inc.'s. That gives the two firms roughly an 11% share in the U.K.'s oil and natural-gas production.

Chinese oil companies have also set themselves ambitious targets for international production. Sinopec has a target for overseas production from just under 500,000 barrels per day in 2011 to a million barrels per day by 2015. Cnooc aims to have 30% of its total production come from abroad by 2015, up from 20% in 2010. China National Petroleum Corp. hopes to double overseas production to two million barrels a day by 2015.

For Cnooc, the need to do deals is all the more pressing following last year's oil spill at its Penglai field in northeastern China that reduced production, and regulatory delays over BP PLC's attempt to sell its stake in Argentine crude-oil producer Pan American Energy LLC to Cnooc.

In terms of geography, Canadian and British exploration and production companies are the most likely targets given the lower degree of hostility towards Chinese companies, though Bernstein acknowledges that the Unocal Corp. experience still looms large in the minds of Chinese executives. They have tried to mitigate potential conflicts in various ways since. For example, Sinopec hired a third party in Canada to market all of its production in its investment in Alberta's Syncrude oil-sands project.

North American companies also have the technological and operational expertise Chinese companies are hankering after to use not only at home but at all their assets around the world. However, Nomura notes that the Cnooc-Nexen deal would end up being "value destructive" for Cnooc because of the high execution risks associated with operating the ultra-deepwater assets in the Gulf of Mexico and the North Sea, something that has dragged down Nexen's share price over the last few years.

Latin America, in particular offshore Brazil, will continue to be attractive, particularly in the light of political obstacles in Argentina, says Bernstein. The Middle East and North Africa will be off-limits for a while for China given geopolitical risks and dangers facing Chinese workers including kidnappings, with the exception of Iraq and Kurdistan, as China is one of the largest buyers of crude from Iraq, particularly Rumaila, the country's largest oil field.

"The scale of Iraq's reserves has made them a rare prize for China's national oil companies," said Bernstein.

CNPC is particularly active in Iraq, having been engaged there since the mid 1990s, and is jointly developing the field with BP. Last week, PetroChina Ltd., a CNPC subsidiary, said oil production started at the Halfaya oil field in southern Iraq. Iraq holds the third-largest oil reserves in the world.