China in Africa
7. China's Energy Footprint in Africa
In
the
space
of
just
a
few
short
years,
China
has
quickly
entrenched
itself
as
one
of
themost
active
foreign
energy
players
on
the
African
continent.
This
has
to
do
with
the
searchfor
more
secure
oil
supplies
in
the
face
of
static
if
not
declining
domestic
oil
production.While
Chinese
companies
lack
technical
capacity
to
tackle
ultra-deep
oil
explorationprojects,
strategic
alliances
with
companies
such
as
Chevron-Texaco,
Petrobras
and
TotalSA
in
places
like
West
Africa,
will
assist
in
accessing
new
drilling
techniques.
Until
2000,
China’s
presence
in
Africa’s
oil
industry
was
confined
to
just
Sudan
where
thestate
owned
China
National
Petroleum
Corporation
(CNPC)
has
been
a
major
stake-holderin
the
Greater
Nile
Oil
Project
Company
(GNOPC)
alongside
Sudan’s
Sudapet,
Malaysia’sPetronas
and
the
Indian
Oil
and
Natural
Gas
Corporation
(ONGC)
Videsh
since
1997.Today
Chinese
oil
companies
are
operating
in
nearly
20
African
countries
in
both
theupstream
and
downstream
sectors,
and
pose
a
significant
strategic
and
economicchallenge
to
both
established
majors
and
smaller
independents,
which
for
many
yearsenjoyed
unparalleled
ascendancy
in
the
continent’s
energy
sector.
China’s Energy Footprint in Africa – 2000
7.1. The 9/11 Crisis
China’s burgeoning oil demand and the 2001 9/11 Trade Centre catastrophe triggered thecountry’s energy policy-makers to decrease its reliance on Middle-Eastern supplies, at thetime the source of nearly 60 percent of its oil imports. Security of energy supplies isuppermost in the strategic planning of China’s policy-makers, according to ManouchehrTakin, a senior analyst at the London-based Centre for Global Energy Studies (CGES). [AFP, Paris, 2 February 2004.]
Consequently, China moved quickly to develop “secure” overseas oil resources(sometimes called “reserve transitional markets”), in such diverse places as Peru, Canada,Venezuela, Thailand, Kuwait, Central Asia, Russia, Sudan, Angola, Niger, Nigeria, SaoTome Principe and Equatorial Guinea. Some of the “brains” behind this drive was visionaryoil engineer Qin Anmin, president of the CNPC subsidiary China Petroleum EngineeringConstruction Enterprise Group (CPECEG), and Tan Zhuzhou, head of the ChinaPetroleum Commerce and Industry Association (CPCIA) and honorary Chairman ofKunshan Dikun Fine Chemicals Ltd, among others.
In April 2004, many deputies and members of China’s National People's Congress (NPC) and in sessions held by the Chinese People's Political Consultative Conference (CPPCC), called for the early enactment of new legislation to secure reliable oil supplies and the more effective exploitation of the country's oil resources. In a sense this was echoing and rubber-stamping the earlier sentiments expressed by the CPC`s strategic policy making organs.
According to Yang Qing from the Energy Research Institute of the Chinese State Development Planning Commission, the country’s oil industry is being reformed: "The issue of oil security is related to both the market for oil and the stability of oil supplies.Overall, it's a matter of structural reform." [Peoples Daily, “Oil Security: A top Priority for China”, 1 May 2004.]
Consequently, Chinese firms have not only been tapping more domestic oil sources buthave also been energetically pursuing a "go-out" strategy, looking for new and stablesources of oil in the international market. Importantly, there is a calculated move tosegment out oil supplies from the open market – a development lost on free tradeproponents
7.2. The Rush for Africa
A
reprioritization
of
its
energy
supply
sources,
has
seen
China
aggressively
enter
theoffshore
oil
industry
in
heavyweight
oil
producing
African
countries
such
as
Angola
andNigeria,
venture
into
high
risk
areas
such
as
Chad,
Sudan,
Mauritania,
Niger
andEquatorial
Guinea,
and
looking
for
new
exploration
opportunities
in
Ethiopia,
Kenya,Madagascar
and
Uganda.
Establishing
joint
ventures
with
local
state
owned
oil
companiesis
another
facet
of
Chinese
engagement
to
remain
strategically
close
to
political
decisionmakersin
the
energy
arena.
This
has
been
evident
with
joint
ventures
established
withSudapet
(Sudan),
Sonatrach
(Algeria),
Sonangol
(Angola)
and
the
Nigerian
NationalPetroleum
Corporation
(Nigeria).
Leading
the
charge
into
Africa
has
been
the
China
national
petroleum
Corporation(CNPC),
China
National
Offshore
Oil
Corporation
(CNOOC)
and
Sinopec,
backed
by
anarray
of
affiliated
groupings
including
China
National
Oil
and
Gas
Exploration
andDevelopment
Corp
(CNODC),
PetroChina,
BGP
International,
and
the
China
PetroleumEngineering
&
Construction
Group
(CPECC).
They
have
gone
head
to
head
with
theworld’s
largest
oil
majors
in
securing
oil
reserves
in
offshore
deepwater
blocks
in
countrieslike
Angola
and
Nigeria.
On
9
January
2006,
the
Chinese
oil
company,
CNOOC
Ltd,announced
a
US$2,3
billion
purchase
of
a
45
percent
stake
in
Nigeria's
OML
130deepwater
oilfield.
This
was
CNOOC's
first
venture
into
Africa
and
the
single
largestChinese
investment
made
on
the
continent
at
the
time.
A
few
months
later,
Sinopec
beatoff
global
competitors
to
lay
claim
to
oil
rich
offshore
deepwater
prospecting
blocks
inAngola
in
deals
worth
US$2,4
billion.
A
turning
point
for
China’s
oil
acquisition
programme
in
Africa
came
in
2000,
when
overthe
period
from
January
to
May
2000,
China's
oil
imports
from
Africa
rocketed
to
307
000bpd,
an
increase
of
174
percent
over
the
previous
year's
figures
of
132
000
bpd.
Thelargest
country
exporter
of
crude
to
China
was
Angola
with
174
000
bpd
up
from
a
mere43
000
bpd
the
year
before.
Next
was
Sudan
at
43
000
bpd
from
zero
the
previous
year,followed
by
Congo
Brazzaville
at
19
000
bpd,
also
from
zero
the
previous
year.
In
2001/2002
Chinese
oil
companies
aggressively
branched
out
across
Africa
with
its
sitesfirmly
set
on
north-west
Africa/Maghreb
region
and
the
Gulf
of
Guinea.
CNPC
along
withits
partially
privatized
affiliate
PetroChina
and
its
engineering
arm
CPECC
moved
intoAlgeria,
Libya,
Niger,
Morocco
and
Chad
despite
the
latter’s
diplomatic
relations
withTaiwan.
Later
it
moved
into
Mauritania
and
Mali
while
its
sister
rival,
Sinopec,
moved
intoAlgeria,
Angola,
Egypt,
Gabon
and
Nigeria.
In
both
instances
vital
strategic
considerations
were
at
stake.
China’s
move
into
NorthAfrica
was
linked
to
security
concerns
related
to
tracking
the
movements
and
activities
ofUighur
Islamic
extremists
from
its
Xinjiang
Province.
Security
cooperation
agreementswere
put
in
place
with
countries
like
Algeria
and
Niger
to
fight
global
terrorism,
or
morespecifically
Salafist
elements
operating
in
the
region,
and
thought
to
be
collaborating
withUighur
elements
in
China.
Securing
the
use
of
ports
for
the
use
by
Chinese
naval
warshipshas
been
another
component
of
China’s
economic
and
diplomatic
thrust
into
the
region.These
include
the
use
of
ports
in
Algeria,
Egypt
and
Tunisia.
Like
the
US,
China
also
saw
the
Gulf
of
Guinea
as
an
important
source
of
crude
as
well
asother
natural
resources
such
as
bauxite
and
timber,
from
countries
whose
oil
output
is
setto
increase
for
the
next
decade
at
least.
This
in
turn
has
heightened
Chinese
militaryconcerns
in
securing
Sea
Lanes
of
Communications
(SLOCs)
in
the
region
to
protecttankers
plying
the
oil
routes
to
feed
the
Chinese
economy.
Consequently,
militaryagreements
have
been
reached
with
a
number
of
countries
in
the
region
related
mainly
tonaval
defence
cooperation
including
Sierre-Leone,
Nigeria
(coastal
defence),
Cameroon,Equatorial
Guinea
and
Angola.
China’s Energy Footprint in Africa - 2009
Nigeria
was
seen
as
an
important
prize
in
securing
a
foothold
in
the
Gulf
of
Guinea,although
perhaps
not
the
most
important
given
the
established
position
of
existing
Westernoil
majors.
So
China
shifted
its
focus
to
Angola,
not
considered
so
firmly
set
inWashington’s
orbit,
and
emerging
potential
areas
such
as
Chad,
Equatorial
Guinea,
Nigerand
Sao
Tome
and
Principe
(STP).
Leading
the
charge
here
has
been
Sinopec
-
China’ssecond
largest
oil
company
and
largest
refiner
of
petroleum
products
–
and
more
recentlythe
China
National
Offshore
Oil
Corporation
(CNOOC)
specializing
in
deep
sea
oilextraction
activities.
However,
recent
setbacks
in
Angola
have
seen
China
re-engagemore
strongly
with
Nigeria.
In
Equatorial
Guinea,
where
US
groups
dominate
a
surging
oil
business,
China
provided
apackage
of
military
training
and
specialists
as
the
precursor
to
getting
entrenched
in
thecountry’s
oil
industry.
After
a
visit
to
Beijing
in
October
2005,
President
Teodoro
ObiangNguema,
described
China
as
its
main
developmental
partner.
By
2004,
China
imported
28,7
percent
of
its
oil
requirements
from
Africa
–
some
35
milliontons.
Today
this
figure
is
nearer
31
percent.
Sources of China's Oil Imports [1999-2004] (10 000 TONS)
Source: Paper presented by Wu Lei, professor of International Relations at YunnanUniversity, Kunmig, China, at the China-Arab Cooperation Forum (CACF) in Beijing onDecember 12-13, 2005.
7.3. The New Challenge
The problem for Western oil majors - now reeling from falling oil prices, inventory stocksand depleted capital stocks to pursue new investment opportunities – is that their statebacked Chinese oil counterparts are reaping the benefits of an aggressive global outreachagenda by a political leadership, determined to challenge Western hegemony in thedeveloping world.
They are being assisted by a newly emerging assertive neo-nationalism in the developingworld that wants greater control over their energy production and supplies. First casualtyof this are Western IOCs i.e. in places like Venezuela and more recently Brazil,determined to monopolise total production from its massive new offshore oil find in theSouth Atlantic Ocean.
Additionally, transparency and corporate governance issues undermine the West’s abilityto compete effectively with Chinese corporations.
Consequently, traditional Western oil and gas interests are set to come under increasingthreat from China as global markets expand.
7.4. Some Country Case Studies
Over
just
a
few
years,
China
has
become
Angola’s
most
important
economic
partner
in
theworld,
shunting
aside
its
more
traditional
partners
with
long-standing
energy
interests
suchas
France,
Brazil,
Portugal,
United
Kingdom
and
the
US.
After
the
decision
was
made
to
target
West
Africa
as
both
a
strategic
and
energy
node
inthe
developing
world,
China
aggressively
sought
to
woo
the
Angolan
leadership.
Animportant
turning
point
was
the
May
2000
trip
to
Beijing
by
Angolan
Defence
MinisterKundy
Payhama.
He
heard
from
a
Chinese
general
that
his
country
viewed
Angola
as
astrategic
imperative
to
secure
“Sea
Lanes
of
Communications
(SLOCs)".
SLOCs
concernChina’s
strategic
focus
on
protecting
its
ability
to
access
oil
from
oil
producing
regions
likethe
Persian
Gulf
and
West
Africa,
via
access
to
a
string
of
naval
berthing
points
straddlingthe
oil
routes
for
use
by
its
expanding
deepwater
fleet.
The
next
step
was
to
secure
a
foothold
in
the
Angolan
oil
industry.
The
Chineseleadership
viewed
Angola
as
a
"truly
independent
provider",
more
so
than
Nigeria,
and
onewhose
leadership
is
not
beholden
to
Western
interests
as
closely
as
was
the
case
ofLagos.
Not
surprisingly,
China
has
aggressively
engaged
Angola
on
a
wide
range
ofenergy
cooperation
projects.
Enter Sinopec
Sinopec led the way, first in purchasing ever larger amounts of oil and then becominginvolved in various upstream and downstream projects. In 1999, Angolan oil exports toChina were a mere 43,000 bpd. Coinciding with Kundy Payhama visit the following year,Angola’s exports surged to 174,000 bpd in 2000. In the first six months of 2006, exportshad risen to over 500,000 bpd, accounting for over 18 percent of China’s total oil imports.A turning point in Angolan-Chinese oil relations took place with the visit of Sonangol’sManuel Vicente to Beijing in early 2004 which was focused on steps to enlarge theChinese stake in Angola’s upstream and downstream sectors. Discussions includedSinopec’s possible participation in the proposed Lobito oil refinery set to produce 240 000bpd of refined petroleum products.
Importantly, these talks were held at the time negotiations were underway on China’s US$2 billion concession loan to Angola – the largest raised to date by Luanda, and by thefact that in 2003, Angola had become the third largest source of China’s oil imports. Theextension of the loan in March 2004 from the China Exim-Bank intended for mainlyinfrastructure projects in Angola, entrenched China’s oil interests in the country further.This was topped up by another US$1 billion disbursement in March 2006 and a furtherUS$2 billion in June 2006 – signed off in September 2007.
Sinopec’s entry into Angola was further assisted by growing tensions with the US and theIMF on good governance issues and the French over the Pierre Falcone affair which hadrevealed embarrassing revelations of financial improprieties involving Luanda’s politicalelite. The ousting of Total SA from a portion of Block 3 (Block3/80) in late 2004 inretaliation for French intransigence on the Falcone affair made way for Sinopec to enterthe Angolan offshore industry in February 2005. A new entity was formed known asChina-Angola Petroleum, (now known as Sonangol-Sinopec International) whichcomprises Sonangol, Sinopec and United Petroleum & Chemicals Co Ltd. (Unipec),Sinopec’s multi-purpose petroleum and trading arm.
2004 saw China’s engagement with the Angolan oil sector quicken:
-
Sinopec
eased
out
India’s
ONGC-Vindesh
to
acquire
Shell
Oil’s
50
percent
stake
inBlock
18,
operated
by
BP-Amoco.
Sinopec’s
successful
buy-out
was
linked
to
tworeasons:
a) negotiations at the time around the US$2 billion Chinese loan b) thecompany positioning itself to take up a stake in the proposed Lobito oil refinery. - In March 2004 – the delivery of 10 000 bpd of crude oil was tied to a US$2 billion Chinese loan to Angola to be repaid over 17 years at 1, 5 percent interest.
- In late 2004, via the intervention of the Portuguese/Angolan Escom International, ajoint venture was established between the Chinese Hong Kong based group BeiyaInternational Development Company and Sonangol in the form of the China-SonangolInternational Holdings (CSIH) based in Hong-Kong. Part of its work will be to assist intraining up Sonangol oil technicians in return for paving China’s entry into Sao TomePrincipe’s potentially lucrative oil market.
The Visit by Premier Zeng Peiyan
However,
the
visit
to
Angola
by
the
Chinese
Vice
Premier
Zeng
Peiyan
in
February
2005concretised
the
China-Angola
relationship.
He
met
with
President
Joao
Dos
Santos
andAngolan
Prime
Minister
Fernando
da
Piedade
Dias
dos
Santos
"Nando".
Other
rankingChinese
officials
who
accompanied
the
Vice
Premier
were
the
influential
Wang
Yang,Departmental
Secretary,
State
Council;
Deputy
Minister
of
Trade
Wei
Jianguo;
ZhangGuobao,
Minister
in
the
National
Development
Commission
(who
dealt
with
the
strategicangle
of
Gulf
of
Guinea
oil
exploration);
Cai
Xiyou,
Vice-President
of
Sinopec
and
anumber
of
ranking
officials
from
the
Defence
and
Foreign
ministries.
Other
Angolan
officials
involved
in
the
discussions
with
the
Chinese
included
KundyPaihama
(Defence),
Aguinaldo
Jaime
(then
Deputy
Prime
Minister),
José
Pedro
Morais(Finance),
Chairman
for
Reconstruction
General
Helder
Viera
“Kopelipa”,
Manuel
Vicenteof
Sonangol,
the
Minister
of
Mines,
etc.
A
total
of
nine
cooperation
accords
were
signed
in
Luanda
at
the
end
of
the
talks.
Fivewere
inter-governmental
ones
and
four
at
business
level.
Oil
was
the
main
theme
ofagreements
reached
and
covered
the
following:
- Energy, mining and infrastructure
- The establishment of a cooperation commission
- Technical cooperation that included a new loan from the Chinese Government to Angola, of US$ 6,3 million
- Cooperation between the ministries of Oil, Geology and Mining of Angola and China National Commission on Development and Reform
- Angola’s Sonangol to supply oil to its Chinese Counterpart, Sinopec
- Two memorandums of understanding linked to a joint study on the oil exploration of Angola's Block 3/05 (formerly Block 3/80), between Sonangol and Sinopec and another one on the joint exploration of the country's new oil refinery
- A new telephone network cooperation contract between the Chinese group ZTE Corporation International and the Angolan firm Mundostartel, estimated at US$69 million
Other
significant
Chinese
developments
in
this
sector
have
included
the
following:
February
2006:
Angola
became
China’s
main
oil
supplier,
beating
Saudi
Arabia
to
cover13
percent
of
its
total
imports.
According
to
Swiss-based
Petromatrix
gmbh(PG),
Chinaimported
2,12
million
tons
of
crude
from
Angola
that
month
compared
to
1,98
million
tonsfrom
the
Arab
country.
March
2006:
China
and
Angola
announced
the
establishment
of
a
joint
venture
betweenSonangref
and
Sinopec
to
build
the
much
discussed
US$3,4
billion
oil
refinery
in
Lobitowith
a
capacity
of
upwards
to
240
000
barrels
per
day.
After
years
of
disinterest
bypotential
foreign
investors
who
felt
that
it
was
a
marginal
project,
rising
oil
prices
and
thesudden
shortage
of
refined
oil
products
saw
China
step
into
the
breach.
April
2006:
Angola
overtakes
Saudi
Arabia
in
becoming
the
largest
single
supplier
of
crudeoil
to
China
–
some
456
000
bpd.
June
2006:
SSI
acquired
massive
stakes
in
offshore
Blocks
15,
17
and
18
at
a
total
cost
ofUS$2,2
billion.
The
three
blocks
have
total
proven
reserves
of
3,2
billion
barrels
of
oil
andwere
expected
to
boost
oil
production
for
Sinopec
by
100
000
bpd
after
they
come
onstream
in
2007.
Beating
off
industry
heavyweights
such
as
BP-Amoco
and
Total
SA,
SSIacquired
stakes
of
27,5
percent,
40
percent
and
20
percent
in
the
off-shore
blocksrespectively.
Sinopec
holds
a
55
percent
stake
in
the
SSI
joint
venture.
This
acquisition
islinked
to
the
supply
of
oil
to
the
planned
Lobito
refinery.
March
2007:
China
suffers
a
major
setback
when
Sonangol
announced
in
March
2007that
the
Lobito
deal
with
Sinopec
was
no
longer
on.
According
to
Angolan
sources,
theChinese
wanted
to
set
up
the
plant
to
produce
fuels
and
products
that
were
solely
adaptedfor
the
Chinese
market.
Sonangol
refused
to
accept
this
condition
and
rather
pulled
out
ofnegotiations
than
accept
the
construction
of
a
Chinese'
refinery.
Vicente
summed
it
upwhen
he
stated
that:
“We
can
not
make
an
oil
refinery
solely
to
produce
for
China”.
2008:
rumours
circulate
that
Sinopec
is
putting
up
its
share-holding
in
Blocks
15,
17
and18
for
sale
linked
to
the
aborted
Lobito
refinery
deal.
However,
to
date,
no
sale
has
takenplace.
A
key
facet
of
the
visit
to
Gabon
by
President
Hu
Jintao
in
early
2004
was
securing
an
oilimport
contract
worth
1
million
tons
per
year
of
Total
Gabon
produced
Gabonese
oil.
Thisdespite
Gabon’s
declining
oil
production.
The
deal
signed
on
31
January
2004
involvedUnipec’s
Tang
Suxin
and
the
head
of
Total
Gabon,
Jacques
des
Grottes,
with
provisionsbuilt
into
the
contract
to
increase
oil
supplies
subject
to
bilateral
agreed
to
revisions.Unipec
is
the
import
and
export
"arm"
of
China's
Sinopec.
One
of
the
key
movers
behind
the
oil
deal
at
the
time
was
Total
Gabon’s
Jacques
Marrauddes
Grottes,
a
French
economist
and
lawyer
in
his
late
fifties
considered
a
"no
nonsense"technocrat
in
oil
matters,
who
helped
break
months
of
indecision
on
finalising
the
deal.
Inthe
past,
Des
Grottes
worked
as
Elf
Aquitane’s
oil’s
strongman
in
Nigeria,
Angola,
Trinidadand
Colombia.
He
was
promoted
to
Director
General
of
Total
Gabon
in
2001,
and
currentlyheads
Total
Upstream-Nigeria
The
significant
aspect
of
this
deal
was
that
Gabon
would
guarantee
China
1
million
tons
ofoil
per
annum,
irrespective
of
the
threat
of
declining
oil
production
faced
by
Gabon
over
thenext
few
years,
in
the
absence
of
new
discoveries.
More
important,
and
not
noticed
in
the
general
media,
was
a
second
deal
signed
betweenSinopec
and
the
Gabonese
Minister
of
Energy
and
Oil,
in
a
ceremony
presided
over
byGabon’s
Oil
Minister
Richard
Onouviet
and
Chen
Tonghai,
another
rising
star
in
theChinese
oil
business
and
one
of
the
powerful
heads
of
Sinopec.
The
deal,
covering
several
areas,
was
signed
as
a
"private
matter
of
the
corporate
world
ofChina",
just
hours
after
the
departure
of
Hu
Jintao
on
1
February
2004.
It
was
essentially
a
"technical
evaluation
agreement"
that
allows
the
PRC
to
conductfeasibility
studies
and
technical
surveys
in
three
blocks
south
east
and
north
east
of
PortGentil,
named
LT2000,
DT
2000
and
GT
2000.
It
opens
the
door
for
PRC
exploration
indeep
and
very
deep
offshore
waters,
and
also
in
unexplored
onshore
densely
forestedareas.
It
also
deals
with
PRC's
participation
in
refinery
and
technical
training
of
Gaboneseofficials
and
employees
and
in
a
way
"completes"
the
Total-Unipec
deal,
as
it
also
includesprovisions
for
joint
actions
and
projects,
including
engineering
and
survey
operations.While,
there
are
doubts
on
China’s
capacity
to
engage
in
ultra-deepwater
survey
andexploration
work,
these
technical
constraints
are
being
overcome.
Total
SA
has
around
58
to
60
percent
of
direct
company
shares
of
Total
Gabon,
and
islooking
for
new
parties
willing
to
take
risks
to
further
open
up
new
oil
fields.
China
is
apotentially
useful
partner
given
broader
shared
global
outlooks
on
dealing
with
theWashington
factor.
This
is
evident
in
joint
venture
agreements
signed
between
Total
anChinese
companies
in
places
like
Venezuela.
At
the
time,
assessments
made
by
local
analysts
were
that
the
Chinese
push
into
Gabonhad
a
lot
to
due
with
the
expansion
of
oil
exploration
underway
in
neighbouring
São
Tomé,and
Equatorial
Guinea’s
emergence
as
potentially
the
new
Kuwait
of
Africa.

Nigeria remains one of China’s most important strategic partners in Africa and the mostimportant in West Africa. Nigeria’s attractiveness to Beijing hinges on several issues:
- Its location in the strategic Gulf of Guinea region.
- Its potentially massive domestic consumer market of 130 million people.
- Its continental and regional influence in institutions such as the African Union (AU),Nepad, Ecowas and Ecomog.
- Most importantly, its massive oil reserves.
China’s interest in Nigeria coincided with President Olusegun Obasanjo’s “look Eastpolicy” which emerged at the beginning of the new millennium in reaction to growingWestern influence and intrusion into Nigerian domestic affairs. This decision was theresult of complaints that Nigeria was being treated unfairly by Western companies; the‘interventionist’ nature of some Western governments; and, an assessment that the globaleconomic and political balance of power was shifting towards the East. At the same time,China's relations with Africa were shifting, from holding a strong ideological bias in supportof communist regimes and Marxist insurgencies to being led by market and resourceacquisition considerations.
To give substance to his “look East” policy, Obasanjo personally pushed for the purchaseof 15 Chinese F-7 aircraft at an estimated cost of US$251 million in September 2005.China in return made noises about Nigeria obtaining a seat on the UN Security Council(UNSC).
According to government sources close to the presidency, President Obasanjo pushed forthe arms deal with China because he wanted Nigeria to ‘diversify’ its relations, as well asto position the country in relation to mooted reforms being discussed for the UNSC. Chinaheld the key given its interest in Nigerian oil, and the influence it holds in global forumssuch as the UN, IMF and World Bank.
Forging Oil Links
One
of
the
earliest
known
contacts
in
forging
energy
links
was
made
in
January
2000,when
China’s
then
foreign
minister,
Tang
Jiaxuan,
led
a
delegation
of
government
officialsto
Abuja.
Central
to
the
discussions
were
China’s
involvement
in
the
oil
industry
in
Nigeriaand
an
increase
in
defence
cooperation.
According
to
reports
received
at
the
time,
thePRC
delegation
was
pushing
for
a
multi-million
dollar
contract
for
their
China
GeologicalEngineering
Company
(CGEC)
in
Nigeria’s
petroleum
industry.
A
year
later,
the
Bureau
of
Geological
Prospecting
(BGP),
an
affiliate
of
the
China
NationalPetroleum
Company
International
(CNPCI)
Nigeria
Ltd,
won
tenders
for
seismic
surveywork
in
Igbomarotu
(River
Nun)
and
Nembe.
In
late
February
2003,
Nigeria’s
Vice-President,
Atiku
Abubakar,
received
Chen
Haozhu,the
influential
head
of
the
PRC
Association
for
Friendship
with
Foreign
Countries(CPAFFC).
Haosu
said
that
China
considered
Nigeria
"a
strategic
vital
partner",
andcongratulated
the
Obasanjo
dispensation
for
enlarging
the
avenues
of
bilateral
ventures,that
he
expected
would
grow
substantially
in
the
very
near
future.
Nigeria’s
growing
strategic
energy
importance
to
Beijing
was
underlined
during
the
visit
toNigeria
in
November
2004
of
influential
CPC
Politburo
member,
lawmaker,
strategist
andhead
of
the
CPC’s
National
Peoples
Congress
(NPC),
Wu
Bangguo.
During
his
stay,
hesigned
several
economic
agreements
that
included
more
oil
deals
with
the
Nigeriangovernment.
In
his
entourage
were
high-powered
members
of
China’s
oil
industry
who
hadarrived
to
make
a
last
minute
assessment
of
the
oil
blocks
put
out
for
tenderin
the
Nigerian/Sao
Tome
and
Principe
(STP)
Joint
Development
Zone
(JDZ).The
agreements
with
Nigerian
President
Olusegun
Obasanjo,
coveredvarious
industrial
areas
including
oil
exploration,
which
looked
at
jointventures
between
PRC-Nigerian
firms
in
seismic
surveys,
exploration
and
the
marketing
ofgas
in
African
countries
deemed
interesting
for
both
partners,
which
included
STP
andChad.
Support for Nigerian Oil Companies
Indications
are
that
at
that
at
the
time,
Chinese
oil
companies
like
Sinopec
and
insurancecompanies
like
Sinosure,
had
been
given
mandates
by
the
Chinese
government
to
supportNigerian
oil
companies
as
stalking
horses
to
secure
energy
resources
in
sensitive
areaslike
the
Nigeria/STP
Joint
Development
Zone
(JDZ).
For
example,
Sinopec,
reportedlyworked
with
Jagal
Ventures,
a
group
owned
by
Anwar
Jarmakani,
which
controlsNigerDocks,
the
only
local
oil
services
yard.
Jagal
Ventures
was
one
of
the
companies
thatmade
a
pitch
for
oil
blocks
in
the
JDZ
signature
sales,
although
its
name
was
not
amongstthose
officially
made
public
by
the
Joint
Development
Authority
(JDA)
which
administersthe
JDZ.
Chinese
oil
companies
like
Sinopec
have
also
forged
good
relations
with
local
oilbusinessmen
and
government
officials
linked
to
the
oil
industry
in
the
country.
Oneexample
is
the
former
Nigerian
Energy
Minister
and
OPEC
President
Dr
Edmund
Daukoru,who
was
a
key
Sinopec
ally
in
the
Nigerian
government.
In
2005,
CNOOC
bought
a
45percent
share
of
South
Atlantic
Petroleum
Inc.
(Sapetro)
owned
by
ex-Nigerian
generalTheophilus
Danjuma.
China
also
ensured
aid
and
development
packages
went
hand
in
hand
with
the
pursuit
ofoil
concessions
in
Nigeria.
For
example,
CNPC
was
awarded
four
blocks
in
Nigeria'slicensing
round
in
July
2005,
after
it
offered
to
build
a
hydropower
plant
in
the
Mambila,Plateau
State
and
take
a
51
percent
stake
(US$2
billion)
in
the
110
000
bpd
Kadunarefinery.
[See
below.]
Since
2004,
Chinese
petroleum
companies
have
acquired
various
interests
in
Nigerian
oil
production:
- In September 2005, CNPC’s subsidiary PetroChina signed an US$800 millionagreement with the Nigerian National Petroleum Corporation (NNPC) to import 30 000barrels per day for five years;
- On 9 January 2006, China National Offshore Oil Corp. (CNOOC) purchased 45percent of Block ML130 in the Niger Delta, with reserve estimates of 600 million barrelscovering about 500 square miles of Akpo Oilfield and other discoveries. The total dealoffered by CNOCC was worth US$2,7 billion. Today these fields produce 175 000 bpdfor CNOOC;
- Just several months later, CNPC completed the acquisition of a 51 percent stake in theKaduna refinery for a total consideration of US$2 billion. The refinery was designed torefine 110 000 barrels of oil a day, yet due to lack of maintenance, its actual refinerycapacity was only 70 percent of that capacity. Together with this deal, CNPC receivedthe license for four oil blocks—OPL 471, 721, 732 and 298.
- China’s aggressive energy purchasing policy was illustrated yet again when in earlySeptember 2009, China's largest listed offshore oil and gas producer CNOOC put in anoffer to buy six billion barrels of oil - equivalent to one in every six barrels of the provenreserves in Nigeria. While Nigeria’s oil authorities say this is unlikely to take place – ata price tag of US$30 billion, it remains a tempting offer. At the time of writing, talksbetween CNOOC and the Nigerian government were still ongoing.
7.5. Recent Oil Developments
Recent Chinese oil sector developments in Africa include the following:
- Earlier this year it was announced that CNOOC, CNPC and Sinopec were competingto be chosen to lead a bid for an oilfield in Ghana. The sale of an oilfield off the coastof Ghana, the principal asset of unlisted US-based Kosmos Energy, could fetch morethan US$3 billion and is expected to attract bids from oil companies around the world.The field is believed to hold oil in excess of 1,2 billion barrels of already provenreserves. The Chinese government will choose one of China's state-owned oil firms topursue China's bid. However, Chinese authorities denied these rumours.
- In early June 2009, CNPC reportedly signed another US$5 billion contract with Niger’sgovernment to develop the large Agadem field said to hold more than 300 millionbarrels of oil. This excludes mooted plans to build a 2500km pipeline at an additionalcost of US$5 –US$ 7 billion to pipe the oil to southern Benin.
- Sinopec will be the first to kick off a drilling programme in the Nigeria-STP JointDevelopment Zone (JDZ) from the companies awarded blocks in the JDZ’s last biddinground a few years ago. The delay in exploration was caused by a shortage ofdeepwater rigs. Sinopec will spud its first well on Block 2 using Transocean’s SEDCO-702 deepwater rig which arrived on site in early July 2009.
- On 16 June it was announced that China's state oil firm Sinopec InternationalPetroleum Exploration and Production Company Nigeria Limited (SIPEC) and theNigerian Petroleum Development Company (NPDC) have discovered crude oil inNigeria’s conflict ridden Niger Delta region. SIPEC, a subsidiary of Sinopec, andNPDC, the exploration and production arm of the state-run Nigerian NationalPetroleum Corporation (NNPC), jointly discovered crude in the Oil Mining Lease (OML)64, also known as Kakaku-1 well.
- During the visit by a 16 person delegation to Uganda in mid-June by the Industrial andCommercial Bank of China (ICBC), President Yoweri Museveni invited the ICBC toparticipate in the construction of an oil refinery in the country and an oil pipeline toKenya to move refined oil to the coast. The ICBC owns 20 percent of Standard Bankwhich in turn owns 80 percent of Uganda's Stanbic Bank.
-
The
most
significant
development
in
recent
months
is
China
Petroleum
Corporation(Sinopec’s)
bid
to
purchase
Swiss-based
Addax
Petroleum
for
US$7,2
billion
–
the
topindependent
producer
of
Nigerian
crude.
The
Addax
board
has
already
accepted
theoffer
and
it
just
remains
for
the
Swiss
authorities
to
give
its
seal
of
approval
to
the
deal.This
acquisition
confirms
China’s
commitment
to
challenge
the
well
establishedWestern
corporations
in
the
Nigerian
oil
market
Control of Addax Petroleum will give Sinopec a major foothold in West Africa and laythe foundation for a major expansion in the region. Addax has a daily estimatedproduction of over 136 000 bpd and presently controls oil fields in Nigeria, Gabon,Cameroon and northern Iraq. Sinopec’s ownership of Addax will allow China toexpand without the headache of bidding rounds and negotiations with the various oiland gas regimes in the continent. - In July this year, CNPC started work on the construction on an oil pipeline in Chad.The 300-km oil pipeline will carry crude from the Koudala field to the Djarmaya refinery.While the cost of the pipeline or its capacity was not disclosed, Deby’s office said thatthe region Koudala field is located in will eventually produce 60,000 bpd of crude.CNPC also began construction of a one million tons per annum capacity refinery inOctober 2008. The facility is expected to become operational in 2011. CNPC owns a60 percent stake in the refinery, which aims to supply both the domestic market andneighboring countries, while Chad’s state oil company SHT owns the remaining 40percent.
目次
- 1. Introduction
- 2. Africa in the Context of China's Resource Acquisition Requrements
- 3. The Origins of China's New Africa Policy
- 4. The Role of FOCAC
- 5. China's New Resource Acquistion Business Model
- 6. The Role of Chinese Institutions in the Acquisition of Business Intelligence
- 7. China's Energy Footprint in Africa
- 8. China's Mining Footprint in Africa
- 9. China's Telecommunications Footprint in Africa
- 10. China's Infrastructure Footprint in Africa
- 11. The Role of China's Financial Institutions
- 12. Implications for Japanese Investors
- Annexure I: The Focac Fuc Structure
- Appendix II: The Forum on China-Africa Cooperation
- Annexure III: Ministry of Commerce
- Annexure IV:Profile Chen Yuan and Chi Janxin