China Digital Times

China news tagged with: oil diplomacy (7)

• Paul Collier: History is Repeated as Tragedy in the New Scramble for Africa

  

  Paul Collier, director for the study of African economies at Oxford University, writes in the Independent:

  For the past few months Guinea has been ruled by a young army captain who led a successful coup. Not that you’d necessarily know about it: the regime has only hit the world news twice. The first time was for shooting 150 pro-democracy demonstrators: international protest at this abuse has now escalated into an arms embargo. The second time was when the regime signed a $7bn resource-extraction deal with the Chinese. This infusion of money has made a mockery of international pressure.

  But to grasp the deeper affront, the sheer scale of the deal must be appreciated. Guinea is currently a no-go area for reputable resource-extraction companies and so the Chinese faced no competition. If under these conditions they are prepared to pay $7bn for the rights to resource extraction, it is reasonable to suppose that they are worth much more. Yet the national income of Guinea is only $3bn. These natural assets, vast relative to its income, were the society’s lifeline out of poverty. They have been disposed of in haste by a regime without legitimacy.

  Guinea is an extreme instance, but the disregard of the Chinese for standards of governance in winning resource-extraction contracts has become a leitmotif.

  » Read more
  • November 16, 2009 2:27 PM

• China Spends Billions In A Global Spree For Oil

  

  NPR looks at China’s efforts to buy up oil and other energy resources around the world, even from governments that are shunned by most countries:

  Philip Andrews-Speed, an energy expert at the University of Dundee in Scotland, says that by doing this, China is actually increasing the global supply of oil.

  “They’re going in and producing in countries that otherwise people might not be producing in. So actually, at the margins, they are producing more oil to market than would be if nobody was going into those countries,” Andrews-Speed says.

  He says oil producers have various reasons for selling to China.

  Some poorer nations want the infrastructure investment that China often pledges to sweeten an oil deal. Other countries, like Venezuela, see China as a political counterweight to the United States.

  But many are just betting that the global focus of political and economic power is shifting China’s way.

  » Read more
  • October 26, 2009 8:55 PM

• Africa Pressures China’s Oil Deals

  

  The Wall Street Journal reports on China’s increasingly difficult efforts to secure oil deals in African countries:

  On Tuesday, Nigeria’s oil minister and a presidential spokesman said state-owned China National Offshore Oil Corp., or Cnooc, is in advanced talks with Nigeria to take over blocks that are owned by Royal Dutch Shell PLC and other companies, but are underutilized.

  An official with Nigeria’s state oil company said about 20 onshore blocks were on offer and that negotiations were at a late stage with some companies, including Cnooc. He said he wasn’t sure exactly how much crude Cnooc was vying for, but that targeted investment would run into several billion dollars.

  Cnooc officials couldn’t be reached for comment.

  However, a Nigerian government official told Reuters that this is not true:

  Nigeria is not offering oil licences currently operated by Chevron (CVX.N), ExxonMobil (XOM.N) and Royal Dutch Shell (RDSa.L) to China while renewal negotiations are ongoing, a government minister said on Tuesday.

  “We are not offering leases that are up for renewal in the middle of negotiations to renew. That is not happening,” Minister of State for Petroleum Odein Ajumogobia told Reuters in a telephone interview.

  He said CNOOC, China’s no. 3 oil and gas producer, was one of several state-owned Chinese companies searching for opportunities in Nigeria and elsewhere.

  “We are talking to them about their quest to buy proven reserves. This is not new, this predates this administration,” Ajumogobia said.

  The second half of the Wall Street Journal article focuses on the backlash facing China in Africa, as locals increasingly resent the way Chinese companies operate in their countries:

  The news of the Nigeria talks followed setbacks for China this month on deals in Angola and Libya. On Sept. 8, Libya vetoed a $462 million bid by China National Petroleum Corp. for Libya-focused Verenex Energy Inc. Days later, Angola’s state-owned Sonangol said it wanted to block the sale of Marathon Oil Corp.’s 20% oil-field stake to Cnooc and China PetroChemical Corp., or Sinopec.

  The setback in Angola — China’s largest African partner — is in stark contrast with the enthusiastic reception it found there five years ago, when China was launching a quest for African resources to feed its economic boom.

  [...] But some in Africa are starting to find the Chinese embrace too tight. The formula of bartering oil for infrastructure initially had given China’s oil concerns a competitive advantage against Western companies, whose investors were largely unwilling to fund such projects. But those same projects have become a key factor in China’s setbacks. In particular, China state companies’ insistence on keeping local hiring to a minimum has brewed resentment.

  » Read more
  • September 29, 2009 9:42 PM

• China Strengthens Presence in Kazakhstan

  

  The Hindu reports:

  In recent weeks, China has significantly expanded its economic presence in the energy-rich Central Asian nation of Kazakhstan, where a number of countries including India and the United States have in the past few years been in a scramble for a share of its vast resources of oil and gas.

  In the last couple of months, through the acquisition of oil companies by State-owned enterprises, the extension of a 3,000-km oil pipeline and a number of “loan for oil” deals, China has seemingly strengthened its grip over the country’s energy resources.

  On Thursday, the Xinjiang-based Guanghui Industry company received approval from China’s top economic planning body, the National Development and Reform Commission, to acquire a 49 per cent stake worth $40.5 million in a Kazakh oil company. This will allow the company develop oil and gas fields in the Zaysan region.

  » Read more
  • August 23, 2009 10:35 PM

• Tuesday Map: China’s Oil Empire

  

  Foreign Policy reposts a map created by China’s Economic Observer showing China’s big oil companies’ (CNOOC, CNPC, and Sinopec) interests across the globe. As Foreign Policy points out, Sudan is notable absent from the map. Click here or on the map for a fully interactive version:

  

  » Read more
  • July 31, 2009 6:04 PM

• Will Killing of Oil Workers Harden China’s Darfur Policy?

  

  The Christian Science Monitor looks at the possible long-term repercussions of the killing of four Chinese oil workers in Sudan:

  The attack on Chinese oil workers and interests in Sudan comes as many international diplomats are hoping that China will influence its business partner, Sudan, to come to terms with rebel groups and end the six-year war in Darfur. While it is not clear who carried out the killings, the very proximity of Kordofan to both Darfur and to South Sudan – which had its own 21-year civil war against Sudan – is a sign that Sudan’s conflicts may widen and converge.

  “This is very bad news,” says Alex de Waal, a Sudan expert at Harvard University. “The Chinese feel unfairly targeted by world opinion, and reasonably so, because they actually don’t have as much influence in Sudan as some people think. They can’t dictate what the Sudan government does.”

  He says China might decided the risks are too great to continue oil operations in Sudan. “On the other hand … they need oil, and they are not as sensitive to losing people as the Americans or the British would be,” since they don’t have an open news media to criticize Chinese policy in Sudan.

  » Read more
  • October 28, 2008 7:32 PM

• Venezuela, China to Build Refineries, Boost Sales

  

  From Bloomberg:

  Venezuela, the world’s fifth-largest oil exporter, and China plan to build refineries and boost oil shipments, said President Hugo Chavez, who is seeking to lessen dependence on the U.S.

  The countries will sign agreements that will include building a refinery in block Junin 8 in the Orinoco Belt, South America’s biggest oil area, Chavez said today in Beijing in a phone interview with Venezuelan state television. The accords will deepen cooperation between the two countries, he said.

  Chavez, who is in China this week on a tour that includes Russia and Cuba, has sought closer ties with U.S. rivals. Earlier this month, Chavez expelled the U.S. ambassador to Caracas and signed an agreement with Russia’s OAO Gazprom on offshore projects. China, the world’s second-biggest oil user, needs fuel as its economy grows at a double-digit pace.

  Read also Chavez sees 1 million-barrel oil exports to China from AP and a report from CNN.

  Forbes reports on the triangular relationship between China-Venezuela-United States:

  Chavez wants to market more of his country’s oil to China so that it is less dependent on U.S. demand. The United States consumes about 60% of oil exports from Venezuela, the fifth-biggest exporter in the world. “Venezuela has enough oil to last for 200 years,” said Chavez, who heads to Russia on Thursday for the next stop on his five-country tour. “And the Chinese are already working to tap that.”

  While Chavez visited Beijing, Chinese Premier Wen Jiabao was in New York for the opening of the U.N. General Assembly session this week, remarking on Tuesday that China and the United States are “partners,” not rivals. A Foreign Ministry official also sought to reassure the world, emphasizing at a press conference that relations between China and Venezuela are “not based on ideology, are not targeted against any third party and will not affect other countries’ relations with Venezuela.”

  But, in a development likely to irritate Washington, Chavez said he also hopes to cement an agreement to buy combat aircraft, specifically 24 K-8 planes for his country’s air force, from China.

  » Read more
  • September 24, 2008 6:47 AM

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