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Analysis: Africa Big Oil Supplier To China

File map of estimates of identified reserves and undiscovered resources of conventional crude oil in Africa.

Washington (UPI) July 19, 2005
China's increasing energy demands have led it to invest heavily in Africa, which supplies approximately one third of its oil needs.

With a total demand of 5.56 million barrels per day, China is the second largest energy consumer following the United States, with a significant impact in world oil markets, according to the Energy Information Administration country brief.

Developed countries may see Africa as a continent in need of healing or saving, but to China it is also a source of raw materials, especially oil.

China has provided substantial assistance to western Africa though not on the scale of developed countries. Because its aid is in the form of infrastructure construction projects, such as a railroad network in Nigeria, however, China's assistance is said to be less susceptible to Africa's rampant corruption at every level.

China has also created scholarships for African students, and has increasingly encouraged its companies to invest in Africa.

"The Chinese are investing in Africa and are seeing results, while the G-8 countries (the eight leading industrial nations) are putting in huge sums of money and they don't see very much," Sahar Johnny, Sierra Leone's ambassador China, told Online NewsHour with Jim Lehrer on July 5.

As part of its Africa policy, China will not interfere in African internal affairs, which often sparks tension between Washington and Beijing since China is usually reluctant to cooperate with the United States in condemning human rights abuses. On the contrary, U.S. sanctions have provided an opportunity for China to make further its inroads into Africa.

Some 700 Chinese companies are currently operating in 49 African countries. Trade has tripled to $30 billion annually, making China Africa's third-largest trading partner ahead of Britain. In West Africa, for example, China faces little competition as it takes advantage of the many opportunities. Chinese companies are building or renovating government offices and public facilities.

But oil is China's major attraction. Already China receives one fourth of Angola's oil; and Beijing's stakes are increasing in Equatorial Guinea, Nigeria and Gabon.

Sudan exports 60 percent of its oil to China, and Chinese oil companies are providing capital, technology and expertise to Sudan's oil industry. With China's growing investments, Sudan has an opportunity not only to bring in wealth but also a chance to resist pressure from the West.

China has recently strengthened its oil links with Nigeria. The state-owned PetroChina recently signed an $800 million agreement with the Nigerian National Petroleum Corp. to import 30,000 barrels per day for five years.

Nigerian Presidential Adviser on Petroleum and Energy Edmund Daukoru said the deal is the beginning of a bilateral cooperation between the two sides that was initiated in early 2004 when a Chinese trade delegation visited Nigeria.

"What we are witnessing today is the first of the anticipated series of joint venture business co-operation between Nigeria and China," said Daukoru. "The interest of China in the gulf of Guinea where substantial energy resources abound could be seen in that direction."

The Nigerian official said strengthening bilateral cooperation will incorporate downstream petroleum refining and development of Nigeria's power industry. PetroChina expects to take over the operation of the Kaduna refinery and petrochemicals under a privatization deal.

"In 2004 trade between Nigeria and China exceeded $2 billion and since then Nigeria's export to China has increased sharply," said Chinese Ambassador to Nigeria Wang Yongqin. "China would like to import Nigeria's agricultural products such as sesame and cassava."

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China Wants To Expand Sino-US Military Relations
Beijing (AFP) Jan 10, 2006
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