Financial Times: China seeks big stake in Nigerian oil

[Slimprofits]

http://www.ft.com/cms/s/0/9d714f96-a...nclick_check=1

The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.

CNOOC, one of China’s three energy majors, is trying to buy 6bn barrels of oil, equivalent to one in every six barrels of the proven reserves in Nigeria, sub-Saharan Africa’s biggest crude producer and a major supplier to the US.

Details of the talks were revealed in a letter from the office of Umaru Yar’Adua, Nigeria’s president, to Sunrise, CNOOC’s representative, a copy of which was obtained by the Financial Times. The overall value of the Chinese offer is not disclosed, although some details suggest a figure of about $30bn. Some oil sector executives said the total on the table was $50bn.

A spokesman for Mr Yar’Adua said: “Negotiations are ongoing not only with Sunrise/CNOOC but also with all other stakeholders in the industry. The federal government has not taken any final position on the issue.”

The letter, dated August 13, said an initial offer was “unacceptable” but added: “Your interest in all the listed blocks will be considered if your revised offer is favourable.”

[..]

Tanimu Yakubu, the Nigerian president’s economic adviser, said China might not secure “anything close” to 6bn barrels from the negotiations, adding: “We want to retain our traditional friends.”

However, Mr Yakubu told the FT the Chinese “are really offering multiples of what existing producers are pledging [for licences] . . . we love to see this kind of competition”.

[touchring]

Re: Financial Times: China seeks big stake in Nigerian oil

This must be a joke.

The US spends a trillion in war for oil, maims tens of thousands of its own, while China buys oil reserves using free money hurled at them.

Why won't the US print money to buy oil instead of going o war?

[Mega]

Re: Financial Times: China seeks big stake in Nigerian oil

..........and then one day they all decided to STOP paying for oil in DOLLARS!..........and that was the end of the American Empire.

:0)
Mike

[raja]

Re: Financial Times: China seeks big stake in Nigerian oil

Why won't the US print money to buy oil instead of going o war?

War enriches the wealthy businessmen . . . .

[D-Mack]

Re: Financial Times: China seeks big stake in Nigerian oil

..........and then one day they all decided to STOP paying for oil in DOLLARS!..........and that was the end of the American Empire.

:0)
Mike

they are counting on 25%

US seeks to underpin oil supply from Africa

By William Wallis
Published: July 12 2009 19:28 | Last updated: July 12 2009 19:28

The US is increasingly reliant on oil from West Africa for its daily energy needs and forecasts that up to 25 per cent of imports will hail from the Gulf of Guinea by 2015.

http://www.ft.com/cms/s/0/12631f44-6...nclick_check=1

[GRG55]

Re: Financial Times: China seeks big stake in Nigerian oil

This must be a joke.

The US spends a trillion in war for oil, maims tens of thousands of its own, while China buys oil reserves using free money hurled at them.

Why won't the US print money to buy oil instead of going o war?

Do a little thought exercise.

Remove the US Navy Fifth Fleet from its headquarters in the Arabian Gulf Kingdom of Bahrain.

First Iran steams into Manama Bay [within hours] and claims the island nation. Then all hell breaks loose in Saudi's Eastern Province. And down it all goes from there.

Guess what happens to the price of oil.

The only scenario I can see is that the USA first figures out how to run its economy on a LOT less oil, and then hands over the responsibilities of the US Navy in that region to the Chinese...the same way the Royal Navy handed it over to the USA last century... ;)

[touchring]

Re: Financial Times: China seeks big stake in Nigerian oil

Do a little thought exercise.

Remove the US Navy Fifth Fleet from its headquarters in the Arabian Gulf Kingdom of Bahrain.

First Iran steams into Manama Bay [within hours] and claims the island nation. Then all hell breaks loose in Saudi's Eastern Province. And down it all goes from there.

Guess what happens to the price of oil.

The only scenario I can see is that the USA first figures out how to run its economy on a LOT less oil, and then hands over the responsibilities of the US Navy in that region to the Chinese...the same way the Royal Navy handed it over to the USA last century... ;)

I doubt it will work out that way, the Chinese economy does not use much oil in the first place, and it is probably not worth the effort and cost to maintain such a big navy.

United States
— Oil - Consumption: 20.8 Million bbl/day

According to http://flagcounter.com/factbook/us - More sources »

China
— Oil - Consumption: 6.93 million bbl/day (2007 est.)

According to https://www.cia.gov/library/publicat.../print/ch.html - More sources »

[MulaMan]

Re: Financial Times: China seeks big stake in Nigerian oil

and China could do much better in the middle east because they care not one iota about religious freaks - jews, christians, mustlims, sun worshipers, ...

the chinese will just laugh at them and open a Bible Factory in China to supply the flock....

or the chinese may even help them out and simulate the return of Jesus with a little reality TV show called armagedon today.

[touchring]

Re: Financial Times: China seeks big stake in Nigerian oil

and China could do much better in the middle east because they care not one iota about religious freaks - jews, christians, mustlims, sun worshipers, ...

the chinese will just laugh at them and open a Bible Factory in China to supply the flock....

or the chinese may even help them out and simulate the return of Jesus with a little reality TV show called armagedon today.

with communism, they are almost atheists, so it's down to cold business and dollars and cents.

[GRG55]

Re: Financial Times: China seeks big stake in Nigerian oil

I doubt it will work out that way, the Chinese economy does not use much oil in the first place, and it is probably not worth the effort and cost to maintain such a big navy.

United States
— Oil - Consumption: 20.8 Million bbl/day

According to http://flagcounter.com/factbook/us - More sources »

China
— Oil - Consumption: 6.93 million bbl/day (2007 est.)

According to https://www.cia.gov/library/publicat.../print/ch.html - More sources »

Absolute levels of consumption are not the primary driver. Change always happens at the margin. The US needs to reduce its dependence on imported oil, but it does not need to reduce it to anywhere near Chinese levels before the Gulf becomes much less important to it geopolitically. China's situation is the exact opposite...

You also need to consider what is it that the Sunni minority Arab ruling families want/need...and who will provide it to them in the future. On the one hand they have, in recent years, been force-fed a diet of "democracy talk" from the USA**, while they watch China continue an active non-interference policy within ASEAN, even in the egregious case of the bloody Myanmar protests two years ago this month.

The Gulf Arabs already know that their long standing dependence on the USA is becoming a liability. Where do you think they will turn?

And if you think this is farfetched, just imagine how equally farfetched it might have sounded if 100 years ago somebody would have predicted that the mighty Royal Navy would give way in the Persian Gulf to the upstart Americans before the 20th century was half over.

China will not take over this role easily, but over time the benefits to China and the Gulf Arab rulers seem likely to overcome China's reluctance to behave like a dragon, instead of a panda, outside its own borders.

[** In the aftermath of the Gulf War II, with its constantly changing justification, one tee-shirt slogan that did the rounds in the Gulf region was "Be nice to us Americans, or we'll bring democracy to your country too" ]

[touchring]

Re: Financial Times: China seeks big stake in Nigerian oil

Absolute levels of consumption are not the primary driver. Change always happens at the margin. The US needs to reduce its dependence on imported oil, but it does not need to reduce it to anywhere near Chinese levels before the Gulf becomes much less important to it geopolitically. China's situation is the exact opposite...

You also need to consider what is it that the Sunni minority Arab ruling families want/need...and who will provide it to them in the future. On the one hand they have, in recent years, been force-fed a diet of "democracy talk" from the USA**, while they watch China continue an active non-interference policy within ASEAN, even in the egregious case of the bloody Myanmar protests two years ago this month.

The Gulf Arabs already know that their long standing dependence on the USA is becoming a liability. Where do you think they will turn?

And if you think this is farfetched, just imagine how equally farfetched it might have sounded if 100 years ago somebody would have predicted that the mighty Royal Navy would give way in the Persian Gulf to the upstart Americans before the 20th century was half over.

China will not take over this role easily, but over time the benefits to China and the Gulf Arab rulers seem likely to overcome China's reluctance to behave like a dragon, instead of a panda, outside its own borders.

[** In the aftermath of the Gulf War II, with its constantly changing justification, one tee-shirt slogan that did the rounds in the Gulf region was "Be nice to us Americans, or we'll bring democracy to your country too" ]

I think it is possible that China may take a covert military role in the Middle East such as financing and supplying weapons but as for direct involvement I'm not so sure, as for at least the last 1500 years, China doesn't have a warrior culture common to Anglo Saxons, Germanic tribes, Japanese and Arabs.

There is no equivalent of Jihadist, Crusader, Celtic, Germanic, Japanese samurai armies in China since private armies and militias are banned in China by each succeeding emperor, leaving behind a population that is docile, and primarily made up of farmers and merchants. The ruling class is also engrossed in controlling it's people and making sure they obey the law and the ruler.

[GRG55]

Re: Financial Times: China seeks big stake in Nigerian oil

I think it is possible that China may take a covert military role in the Middle East such as financing and supplying weapons but as for direct involvement I'm not so sure, as for at least the last 1500 years, China doesn't have a warrior culture common to Anglo Saxons, Germanic tribes, Japanese and Arabs.

There is no equivalent of Jihadist, Crusader, Celtic, Germanic, Japanese samurai armies in China since private armies and militias are banned in China by each succeeding emperor, leaving behind a population that is docile, and primarily made up of farmers and merchants. The ruling class is also engrossed in controlling it's people and making sure they obey the law and the ruler.

As I noted in the post above, China behaves like a dragon within its own borders, and like a panda outside. But circumstances appear [to me] to be conspiring to force a change on a reluctant China...

[Slimprofits]

Re: Financial Times: China seeks big stake in Nigerian oil

smaller deals, but China is looking like PacMan

China sovereign fund buys 45% stake in Russian oil company

China Investment Corporation (CIC), the nation's sovereign wealth fund, announced Friday that it had closed the first phase settlement for the purchase of a 45 percent stake in Nobel Oil Group.

The $300 million investment would be completed in two phases. In the first phase, which was completed by the end of September, CIC had spent $100 million for holding the Russian oil company's stakes, and $50 million for operating expense of the oil fields, according to the announcement.

It said that the remaining $150 million would be paid off in the second phase, in nine months, to buy oil and gas reserves amounting to 150 million barrels around existing ones.

When the purchase was done, CIC will hold 45 percent of the company's stake while the Russian company will own 50 percent and the rest 5 percent will go to a Hong Kong investor.

The was CIC's second move within one month to buy shares in overseas oil and gas companies. At the end of September, CIC paid $939 million for a stake in Kazakhstan oil and gas company JSC KazMunaiGas Exploration Production.

[skyson]

Re: Financial Times: China seeks big stake in Nigerian oil

As I noted in the post above, China behaves like a dragon within its own borders, and like a panda outside. But circumstances appear [to me] to be conspiring to force a change on a reluctant China...

Your dragon panda metaphor make me chuckle quite a bit. Funny observation.

I agree with touchring, China has never been an active "out-looker" in her entire history. That is why we would amaze at the marvelous Great Wall of China, and at the same time wonder whose idea it was to built this stupid wall that does nothing? Yes, traditionally, the Chinese are a group of self-indulged people who would rather put up a fence and enjoy the BBQ, forgetting whatever the neighbors are doing. I believe it is this set of passive characters get them into trouble in the last 200 years when facing the aggressive Anglo Saxons competitors. Will this change in the future, I don't know. But despite the recent massive advancement in its economy and the alarming expansion in the eyes of western observers of its military capabilities, I still see the passive attitudes(in the sense of territory and outward military projection) in the general populace.

Moreover, in the past, China had everything they need for their economic development(or so they thought). This is not true at present. Oil has become the essential element in any modern economy, and China is heavily depending on the supply of cheap oil for its export-heavy industry. So in the long term, middle east would become more and more important, and it would not be surprise for China to project military power there to protect its interest.

But I would not envision a scenario that Chinese Navy will pursue the similar policy and strategy as the US Navy. For China historically is a land power. You might see the Chinese riding horses(or bicycles), how often do you see them sailing a boat as a leisure activity? Heck, they have been talking about building a air carrier for the last 20 years, but as far as I know, there is not one on the water yet. And it will take them another 20 years to assimilate a ready battle group that could compete with the sophistication that the US navy posses.

If they want to secure the oil land in the middle east, I believe they will pursue the land route through Pakistan and Iran. They have well travelled the "silk route" in the past to trade with the ME and Europe. That is the true intention of forming the Shanghai Cooperation Organization - securing this blood line to the middle east, and possible route for military projection.

For all PLA battle groups, the north-western group are the most formidable battle ready. During the Russian Afghan War era, US and China formed alliance against the Russian bear. Chinese special forces regularly entered the Pakistan mountain ranges and protected the transportation of US supplied weapons to the Afghanistan guerrilla forces. Now, in this US Afghan War, friends and enemies reversed positions, proving the famous Churchill words:"No permanent enemies, no permanent friends, only permanent interests". Who can imagine what the Chinese or Russians are doing there at this moment? The recent Xin Jiang riot, the Pakistan internal turmoil, the resurging Talibans, the Afghan NATO commander's recent comment about this "unwinnable war", and Obama's call for enforcement troops in this region...we could only say: there are many actions going on there.

In my mind, the NATO's adventure in the Central Asia is destined to fail, and the Chinese influence will slowly project into middle east via this fascinating "silk route" - might be by the columns and columns of tanks, and of course with those pink skirt white boot cutie soldiers




Relevant news:
China, Russia kick off joint anti-terror exercises
China's biggest ever military exercise

[GRG55]

Re: Financial Times: China seeks big stake in Nigerian oil

Your dragon panda metaphor make me chuckle quite a bit. Funny observation.

I agree with touchring, China has never been an active "out-looker" in her entire history. That is why we would amaze at the marvelous Great Wall of China, and at the same time wonder whose idea it was to built this stupid wall that does nothing? Yes, traditionally, the Chinese are a group of self-indulged people who would rather put up a fence and enjoy the BBQ, forgetting whatever the neighbors are doing. I believe it is this set of passive characters get them into trouble in the last 200 years when facing the aggressive Anglo Saxons competitors. Will this change in the future, I don't know. But despite the recent massive advancement in its economy and the alarming expansion in the eyes of western observers of its military capabilities, I still see the passive attitudes(in the sense of territory and outward military projection) in the general populace.

Moreover, in the past, China had everything they need for their economic development(or so they thought). This is not true at present. Oil has become the essential element in any modern economy, and China is heavily depending on the supply of cheap oil for its export-heavy industry. So in the long term, middle east would become more and more important, and it would not be surprise for China to project military power there to protect its interest.

But I would not envision a scenario that Chinese Navy will pursue the similar policy and strategy as the US Navy. For China historically is a land power. You might see the Chinese riding horses(or bicycles), how often do you see them sailing a boat as a leisure activity? Heck, they have been talking about building a air carrier for the last 20 years, but as far as I know, there is not one on the water yet. And it will take them another 20 years to assimilate a ready battle group that could compete with the sophistication that the US navy posses.

If they want to secure the oil land in the middle east, I believe they will pursue the land route through Pakistan and Iran. They have well travelled the "silk route" in the past to trade with the ME and Europe. That is the true intention of forming the Shanghai Cooperation Organization - securing this blood line to the middle east, and possible route for military projection...

Your conclusion is illogical.

China has absolutely no possible hope of securing the Persian Gulf via some land route...the world has long ago moved beyond the days of Ghengis Khan and Marco Polo.

You are thinking in one dimension in a 4-dimensional world. Expand your imagination and consider what it really means to be a global economic power. For example, explain to us exactly how China protects its critical geopolitical and trade interests with a land force in this situation...700 miles off the coast of Somalia...:p

Chinese ship hijacked in Indian Ocean

October 19, 2009 -- Updated 1459 GMT (2259 HKT)

(CNN) -- A Chinese ship with 146 people aboard was hijacked Monday in the Indian Ocean, the European Union Naval Force said.

The bulk carrier De Xin Hai was hijacked around noon about 550 nautical miles northeast of the Seychelles and 700 nautical miles off Somalia's eastern coast, the EU Naval Force said in a statement.

The EU force found the ship not long afterward. Two pirates could be seen on deck, but as many as 20 could be on board, a task force spokesman said.

The 146 people on board included 25 Chinese crew members, said John Harbour, a commander with the British Royal Navy who serves with the EU Naval Force.

The naval force was monitoring the ship's movements Monday afternoon.

The ship was dragging two skiffs behind it, much like the kind of skiffs that pirates have been known to use to hijack ships in the waters off Somalia.

Do you think the EU is going to rescue a Chinese ship with Chinese crew? Do you think the pirates are going to stop venturing further and further offshore? Do you think the Chinese are going to stand by and not respond? In due course the Chinese Navy is going to displace the US Navy in the Persian Gulf. Count on it.