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China's growing thirst for African oil

China not courting Africa only for energy: Wen
Chinese Premier Wen Jiabao denied that Beijing was developing ties in Africa purely to satisfy its need for energy, as he headed for talks with the continent's leaders, state media reported Saturday. Speaking while on the plane to Egypt, where he is due to meet Egyptian President Hosni Mubarak before the Forum on China-Africa Cooperation begins on Sunday, Wen said Beijing had an important role to play in Africa's development.

"Energy cooperation is just one area" where China and Africa were working together, he said. "In no way has China come to Africa solely for its energy sources," he added, according to comments carried by People's Daily. "The aim for China in helping Africa is to reinforce its own role in development," Wen said. Some Western critics have accused China of worsening repression and human rights abuses in Africa by supporting countries such as Sudan and Zimbabwe in its drive to gain access to natural resources.

But other observers have said the closer ties between the two sides are focused on industries that would improve African development such as agriculture, electric power, transportation and water drainage. China is also seen as a key player in ending the six-year war between the Sudanese government and rebels in Darfur. It is a leading weapons supplier to Sudan and importer of its oil.

CNPC, Chevron agree to start developing China gas field
China National Petroleum Corp (CNPC) said Thursday it had signed a deal with a subsidiary of US energy giant Chevron Corp to start developing a large gas field in southwestern China. The Luojiazhai gas field in northeast Sichuan province will be China's largest upstream onshore project with a foreign partner, state-owned CNPC, the parent of listed PetroChina, said in a statement on its website. The deal was signed with Unocal East China Sea, a subsidiary of Chevron.

The area covers nearly 2,000 square kilometres (800 square miles) and has an estimated resource base of five trillion cubic feet (1.5 trillion cubic metres) of natural gas. Chevron had said previously that the first phase of the 4.7-billion-dollar natural gas project was approved by China's top economic planning agency - the National Development and Reform Commission - last week. That approval came almost two years after Chevron signed a 30-year production-sharing agreement with CNPC to develop the area. Chevron has a 49 percent stake, and the remainder is held by CNPC.

China's Sinopec signs LNG deal with Exxon Mobil
China's Sinopec has signed a preliminary agreement with US energy giant Exxon Mobil to buy two million tonnes of liquefied natural gas (LNG) a year from a project in Papua New Guinea. Asia's largest oil refiner would store the LNG in a receiving terminal in the eastern city of Qingdao, Sinopec said in a statement posted on its website Wednesday. Sinopec, also known as China Petroleum and Chemical Corporation, and Exxon hoped to finalise a binding sale and purchase agreement by year's end, the statement said. The deal would be "long term", the firm said, without providing further financial details. The deal is the latest by a Chinese petrochemicals company as the energy-hungry country tries to secure its access to natural resources. In August, China's biggest oil and gas producer PetroChina ordered 2.25 million tonnes of LNG a year over 20 years from Exxon Mobil's share of Australia's Gorgon plant in a deal worth 41.3 billion dollars.

by Staff Writers
 Lagos (AFP) Nov 6, 2009
 China has dangled a near open cheque book to Africa's major oil producers in a bid to guarantee supplies for decades to come.

It has offered 30 billion dollars to Nigeria and is negotiating for stakes in oil fields in Ghana and Angola and companies that exploit the fields throughout Africa.

China's thirst for oil is expected to be a major topic at the Forum on China-Africa Cooperation, when Chinese Premier Wen Jiabao meets African leaders and ministers in the Egyptian resort of Sharm el-Sheikh from Sunday.

Nigeria, the world's eighth largest producer, appears to be resisting China's approach to buy one sixth of its proven reserves.

Nigeria already supplies about one fifth of the United States's oil needs. President Umaru Yar'Adua recently told Peter Voser, chief executive of Royal Dutch Shell, the biggest investor in Nigeria's oil sector, that his country still wants to maintain ties with its "old" partners.

Shell, ExxonMobil, Chevron and Total, which have been in Nigeria for decades, are in intensive talks with authorities who want to change oil laws, notably the tax regime.

Industry sources say the companies are looking at investing around 23 billion dollars (15.6 billion euros) in Nigeria over the next five years.

But through its state-run China National Offshore Oil Corporation (CNOOC), Beijing is dangling the prospect of 30 billion dollars for a guaranteed six billion barrels of Nigerian oil.

Licences on some of the Nigerian oil blocks are close to expiring but the government has renewed them for one more year.

The weak link is the state-run Nigerian National Petroleum Corporation (NNPC) which the government wants to turn into a financially independent and profitable entity.

NNPC, which has been bedevilled by corruption, relies on state money to finance its operations in joint ventures with foreign oil companies. Chinese entities have made big offers.

"The Chinese have made a proposal which we are considering," junior oil minister Odein Ajumogobia recently told AFP.

"They are asking for six billion barrels of oil from our reserves, but I can tell you that we are not going to give them all of that," he added.

More recently Ajumogobia said NNPC could sell some of its blocks to the Chinese firms. "Why not, if the offer is very good? The NNPC has a right to do what it wants with its assets."

In Ghana, CNOOC is discussing with the state-owned Ghana National Petroleum Corporation (GNPC) the purchase of 23.5 percent of US-based Kosmos Energy's stake in the Jubilee oil fields, one of the largest oil finds in west Africa in the past decade.

Chinese firm SINOPEC recently bought the Canadian oil firm Addax which operates in Nigeria and west Africa, for a mere five billion euros.

CNOOC and Sinopec said in July they have agreed to buy a 20 percent stake in an offshore oil block in Angola from US oil company Marathon Oil Corp.

"The strength of the Chinese is that they are ready to put lots of cash on the table," said a senior executive in Africa with one international oil firm on condition of anonymity.

"So they want to come and work here, there is no problem, there is room for everyone, but not on blocks that are not free," said the oil chief.

Shell financial director Simon Henry recently said: "One thing you probably will have seen, and can be sure of, is that both ourselves and the industry will defend our interests."

Many African leaders have welcomed China's huge investment in the continent, but some officials have also expressed fears that China is buying diplomatic power that could turn into neo-colonialism.

Nine Chinese workers were killed when rebels attacked a SINOPEC oil facility in the Ogaden region of Ethiopia in 2007. Chinese workers have also been kidnapped in Nigeria's troubled Delta oil region.

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ENERGY TECH
Exxon follows China lead in clinching Iraq oil deal
 Baghdad (AFP) Nov 5, 2009
 Exxon Mobil on Thursday became the first US company to win a contract since Iraq's oil industry was nationalised almost 40 years ago, further expanding the role of foreign nations in the industry. The contract to develop West Qurna 1, the war-torn country's second largest field, will boost its production more than eight-fold to 2.325 million barrels per day (bpd), said Oil Minister Hussein ... read more






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