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China, Japan Vie For African Oil

Map of Africa's current oil reserves.

Washington (UPI) Nov 17, 2005
China and Japan are vying for energy supplies around the globe, but African resources are of particular interest to the two rivals.

In addition to the rivalry over energy interests in the East China Sea, Russia, Central Asia and Southeast Asia in 2004, China surpassed Japan as the second-largest importer of African oil following the United States, studies showed.

Japan's African energy supplies rose by nearly 20 percent in 2004, while China's imports grew by more than 35 percent.

Surpassed as the world's second-largest oil consumer in 2003 by China, Japan has emerged as the world's fourth-largest energy consumer and second-largest energy importer, after the United States, according the U.S. Energy Information Administration.

While experiencing a period of slow economic growth over the past decade, Japan assumed a number of steps toward economic deregulation and restructuring as renewed economic growth last year could lead to higher energy demand, the EIA said.

Since the bulk of its oil comes from the Organization of Petroleum Exporting Countries, particularly the Persian Gulf, Japan has sought to diversify its oil import sources away from the Middle East but with little success, due to increasing competition from China and India.

Political differences have distanced Japan from many African nations, especially at the United Nations, while China has supported the position of African nations on Security Council reform and opposes Japan's membership on the body.

By aiming to secure control of African energy resources, China has pursued a policy that is focused on bilateral ties with oil-producing nations, by fostering relationships with African elites, which helps its state-owned oil firms facilitate activities in exploration, extraction, processing and shipping African petroleum.

China receives approximately 25 percent of its oil from Sudan, Chad, Libya, Nigeria, Algeria, Gabon and Angola. Other African nations, such as Equatorial Guinea, are looking to increase or strengthen economic relations with China.

Individually, these countries form a small share of Chinese imports, but the supplies create a significant share of the exports of the African oil-producing nations.

Sudan exports 60 percent of its oil to China, Angola exports 25 percent of its crude, and the remaining countries export a significant percentage of their energy resources.

Chinese oil firms are providing capital, technology and expertise for Sudan's oil fields, United Press International reported in July. Beijing's growing investments give Sudan cash and allow it to resist pressure from the West.

With increasing investment in its African resources, China's capital has allowed it to seriously affect the political and social development of these countries.

In addition to oil, China increased investment and trade with African nations. It supplied Nigeria and Zimbabwe with fighter jets and pursued trade relations with Southern African Development Community countries, local media reported.

China's financial and military support to Sudan during its civil war and violence in Darfur was criticized by many Western nations.

China espouses a policy of non-interference in African internal affairs. China is also reluctant in joining the United States when it condemns human-rights violations, which often causes tension between Washington and Beijing. U.S. sanctions on African countries instead provide an opportunity for China to further its economic ties to the continent.

Much of China's capital targets infrastructure projects facilitating development of the oil industry.

Industry experts say China's financial assistance encouraged Angola to decline loans from the International Monetary Fund that would force it to be accountable in how it allocates earned oil revenues. If it were to open its books, Angola might have to reform.

The Japanese media has scrutinized China's approaches to securing its African energy resources by reporting that Chinese business methods espouse terrorism and anti-democratic African nations.

But as the Bush administration continues to support a policy of spreading democracy and aims to increase energy supplies from sources outside the Middle East, Africa has the potential to become a growing and important supplier and its relations with China will become increasingly critical.

California Gov. Arnold Schwarzenegger said during his visit to Beijing earlier this week it is important for the United States and China -- the world's two largest energy consumers -- to strengthen ties in the energy industry as their demand for energy resources increases.

Diversifying supplies to ensure supplies will meet demand, while ameliorating disruptions, will be the next greatest challenges energy consumers will have to face.

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