Subscribe free to our newsletters via your
. Energy News .

China heads to South America in global energy 'scramble'
by Staff Writers
Shanghai (AFP) Oct 22, 2013

Rosneft, Sinopec sign 10-year oil payment deal
Moscow (AFP) Oct 22, 2013 - The world's biggest listed crude producer Rosneft and Chinese oil giant Sinopec announced on Tuesday a framework agreement on advance payment by Sinopec for Russian oil deliveries.

The deal will see Sinopec -- China's largest oil refiner -- pay 25-30 percent of the total cost of a 10-year contract under which Rosneft will deliver 10 million tonnes of oil per year starting in 2014.

"These are the normal terms that apply to our clients," Interfax quoted Rosneft chief executive Igor Sechin as saying during a signing ceremony in Beijing.

The deal was announced during a visit by Prime Minister Dmitry Medvedev to Beijing that aims to also lay the groundwork for the first Russian natural gas deliveries to the booming Chinese energy market.

Medvedev valued the total cost of the Rosneft-Sinopec contract at $85 billion (62 billion euros).

The heavyweight Moscow delegation in Beijing included the heads of the country's top oil and gas producers as well as Russian Energy Minister Alexander Novak.

Both Medvedev -- who once served as chairman of state-held energy behemoth Gazprom -- and Novak sounded an optimistic note on a potential deal being signed for Russian natural gas deliveries before the end of the year.

"We are now reaching a final agreement on a formula under which gas will start flowing from Russian to China," news agencies quoted Medvedev as saying.

"In essence, we have already agreed on a formula. Now we still need to agree on a price."

Moscow and Beijing have spent years haggling over the gas price -- a dispute that has seen China turn to the Central Asian energy market at Russia's expense.

Novak said that an agreement on the price and the signature of a contract before the end of the year would see Russian natural gas start flowing to the Chinese market in 2018-2020.

"The maximum volume would be 38 billion cubic metres of gas per year," the Prime business news agency quoted Novak as saying.

China's global hunt for crucial energy supplies is taking it into America's backyard, with two Chinese state firms winning production rights to a multi-billion-barrel deepwater oilfield off Brazil.

China National Petroleum Corp. (CNPC) and China National Offshore Oil Corp.(CNOOC) each took a 10 percent stake in Brazil's "Libra" field, alongside three other companies, at an auction on Monday.

Beijing is seeking oil, natural gas and other raw materials to keep the world's second largest economy moving and the government has is encouraging companies to "go out" and make acquisitions to gain both market access and international experience.

"Everyone is scrambling for resources worldwide," said Li Li, an analyst at consultancy C1 Energy.

"The whole of South America is relatively less developed with both abundant reserves and these kind of resources, so Chinese companies are more interested," she said.

China is already the biggest energy user in the world and the Organization of Petroleum Exporting Countries (OPEC) says it could also surpass the United States as the largest oil importer by 2014.

The chief executive of CNOOC, China's main offshore oil producer, said the latest deal will allow entry to an "ultra" deepwater field.

"It also aligns with our philosophy of seeking partnerships to expand our global footprints," Li Fanrong said in a statement.

CNOOC's traditional territory has been the South China Sea and East China Sea but last year it bought Canada's Nexen in a $15 billion deal despite some Canadian political opposition.

Less than two months ago, another Chinese state firm, Sinopec, bought a $3.1 billion stake in an existing oil and gas operation in Egypt -- despite political strife in that country.

The Libra auction drew several participants but no US firms, who saw too many strings attached, including major Brazilian government intervention through its Petrobras company.

Li Li played down the geographical proximity of the Libra field to the US, but acknowledged there was competition for energy resources.

"Chinese firms have a late start, so they must seek new assets which are harder to evaluate," she said.

Petrobras took a 40 percent stake in the field, while Anglo-Dutch giant Royal Dutch Shell and France's Total each grabbed 20 percent.

China already does significant business with Brazil, being a major buyer of its soybeans to feed its more than 1.3 billion strong population.

The two countries recorded $85.72 billion in bilateral trade last year, up 1.8 percent on 2011, making Brazil China's 10th-biggest trade partner.

For CNPC, China's largest oil and gas producer, the Libra deal comes at a time when the group and its listed unit are targets of a government probe into corruption -- which they claim has not affected operations.

A former CNPC chairman, Jiang Jiemin, is under investigation and has been removed as director of China's supervisory body for state-owned firms, state media said last month.

Four other executives of CNPC or subsidiary PetroChina are also under investigation, the companies and state media have said.

Stock investors were little moved by the Brazil venture. In Hong Kong trade CNOOC shares fell 0.63 percent, while PetroChina edged up 0.66 percent. However, Shanghai-listed shares of PetroChina fell 0.51 percent.


Related Links
Powering The World in the 21st Century at

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

UMD Researchers Address Economic Dangers of 'Peak Oil'
College Park MD (SPX) Oct 23, 2013
Researchers from the University of Maryland and a leading university in Spain demonstrate in a new study which sectors could put the entire U.S. economy at risk when global oil production peaks ("Peak Oil"). This multi-disciplinary team recommends immediate action by government, private and commercial sectors to reduce the vulnerability of these sectors. While critics of Peak Oil studies d ... read more

Russia switches Greenpeace piracy charge to 'hooliganism'

US power plant pollution declines 10 percent from 2010

Firms eye power generation in post-Fukushima Japan

South Korean president calls for global energy cooperation

UMD Researchers Address Economic Dangers of 'Peak Oil'

Uniformity: the secret of better fusion ignition

China media hail Russia ties after $85 bn oil deal

China heads to South America in global energy 'scramble'

Spain launches first offshore wind turbine

Key German lawmaker: End renewable energy subsidies by 2020

Installation of the first AREVA turbines at Trianel Windpark Borkum and Global Tech 1

Trump's suit to halt wind farm project to be heard in November

New NRDC Crowdfunding Campaign to Connect Schools to Solar Power

ecoSolargy's End-To-End HDPV Solution Reduces PV System Costs

Santerno Introduces New PV Power Plant Controller that Provides Single Point of Control

Solar Grid Storage and AllCell Partner to Help Ensure Grid Stability

EU to examine govt aid for UK nuclear deal

India starts up controversial Russia-backed nuclear plant

British nuclear plant deal seen as spur to more development

UN atomic agency suffers 'malware' attack

Scientists Identify Key Genes for Increasing Oil Content in Plant Leaves

Ethanol Safety Seminar Planned in Tacoma

US Biodiesel Production Surpasses Set Target for Second Straight Year

AREVA awarded a contract for the construction of a biomass power plant in the Philippines

Is China Challenging Space Security

NASA's China policy faces mounting pressure

Ten Years of Chinese Astronauts

NASA vows to review ban on Chinese astronomers

ADB urges East Asian giants to work together on climate change

Investment to limit climate change is lagging: study

US Supreme Court to hear greenhouse gas cases

'Stadium waves' could explain lull in global warming

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement