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  1. #1
    Join Date
    Sep 2003
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    Default China on global hunt to quench its thirst for oil

    Hi Guys

    An interesting article on the importance of oil:

    China on global hunt to quench its thirst for oil
    - Robert Collier, Chronicle Staff Writer
    Sunday, June 26, 2005


    Move over, Big Oil. There's a new oilman on the world stage -- China.

    China's takeover bid for Unocal Corp. makes clear to sticker-shocked Americans that the 1.3 billion Chinese people are demanding an ever-larger supply of the world's energy to fuel their booming economy and are willing to get it wherever necessary.

    From Central Asia to Latin America, Africa, the Middle East and even Canada, Chinese firms are pumping oil and natural gas in many areas that the United States was counting on to meet its own record-high demand.

    "We need to supply our people, and like every country we need to buy oil from around the world," said Zhou Dadi, director general of the Energy Research Institute, the central government's main policy agency on the subject. "This is part of globalization. It is a strategy of sustainable development. It is part of a historical process."

    While China's supply network does not yet rival the global clout of U.S.- based oil corporations, the shift raises concerns of politicians and analysts in the United States and Southeast Asia who see China as a future global giant motivated by the same powerful self-interest as American Big Oil.

    China's thirst for energy has been a major factor driving up the international price of oil. Light, sweet crude closed at $59.84 a barrel Friday, the fourth record-high day in a row and a sign that American motorists will feel increasing pain at the pump in coming months.

    Chinese petroleum imports are expected to rise by about 8 percent this year -- accounting for about one-third the total worldwide consumption increase, as it has in recent years. Because China's domestic oil production is in a long-term decline, its imports are expected to surpass the U.S. import levels within two decades.

    U.S. officials have been increasingly uneasy as China has signed major deals with Iran, Sudan, Burma and Venezuela, all countries that have strained relations with the United States.

    While the Bush administration tries to build international pressure against Iran over its nuclear aspirations, China has signed a $70 billion long- term oil and gas supply deal with the Tehran government. China has also signed agreements to develop heavy oil reserves in Venezuela, where President Hugo Chavez has emerged as one of Washington's most vocal opponents.

    Even in Canada, the top U.S. oil supplier, Chinese firms have signed three deals this year to tap Alberta's vast oil-sands reserves and to join a pipeline venture to bring crude to the Pacific coast, where it can be shipped to China.

    In many of these new deals, the webs of alliances and rivalries are overlapping. CNOOC Ltd., the 70 percent state-owned company that last week offered $18.5 billion for Unocal, is scheduled to begin imports of liquefied natural gas next year from Australia, in a project that CNOOC co-owns with Chevron, its rival suitor for Unocal. CNOOC also is involved with Chevron in offshore oil production in the Bohai Bay of northeast China.

    Western energy analysts in Beijing say that as the government-owned Chinese oil firms scour the globe for deals, they often have a leg up on the likes of Chevron and ExxonMobil, which are privately owned.

    Because about 80 percent of the world's oil reserves are in the hands of governments, which usually prefer to deal with other state-owned enterprises, Chinese firms can gain favor, said Gavin Thompson, China country manager for Wood Mackenzie, a British energy consulting firm. Although Chinese companies cannot offer the same high-tech methods for exploration, drilling and extraction as the U.S. majors, they gain a negotiating edge by being willing to assume unprofitable side deals that function basically as development aid.

    In 2003 and 2004, for example, the Chinese firm Sinopec signed a series of deals with Saudi Arabia to develop natural gas fields. Sinopec's investment, which ultimately could be worth $4 billion, commits the firm to a wide variety of welfare-state activities, such as building sewage treatment plants and schools.

    Some analysts say this broad brush has served Beijing's foreign policy needs rather than the companies' bottom line.

    "China's acquisition strategy is that it can go anywhere and buy almost anything," Thompson said. "But as a consequence, its asset portfolio has become quite random and scattered."

    Throughout East Asia, even close allies of Beijing show nervousness about its energy appetites.

    China has been wrangling with Japan over natural gas reserves in the East China Sea, and with Vietnam over suspected oil deposits near the Spratly Islands in the South China Sea, setting off worries that such conflicts could turn violent.

    "Throughout all of East Asia, there is a rising new concern about energy security," said Chin Kin Wah, deputy director of the Institute of Southeast Asian Studies, a government-backed think tank in Singapore. "From Russia to China down to Indonesia, there is a new generation of possible conflicts."

    Malaysia's Prime Minister Abdullah Ahmad Badawi sounded a warning at a Kuala Lumpur energy conference June 14: "As governments and companies continue to pour in more and more money to secure additional oil and gas assets, some of these assets may also, unfortunately, lead to various geopolitical maneuverings, disputes and conflicts."

    Chinese officials say that no matter how rich and powerful their country becomes, their need for oil will never turn into U.S.-style gunboat diplomacy.

    "You must realize that China will never be expansionist for the reason of oil," said Xie Feng, a deputy director-general for China's Ministry of Foreign Affairs who is in charge of North American relations. "It will never act like a superpower.

    "It might become a regional power. In all its history over the past thousands of years, China has never sent troops abroad, to have colonies, to seize resources. This is not part of the Chinese character. You must understand our culture. We are not like that."



    --------------------------------------------------------------------------------
    China's expanding oil interests
    Chinese energy firms CNPC, Sinopec, CNOOC and PetroChina have spent billions of dollars on oil and gas production deals around the world during the past two years. Examples include:

    Angola: China made wide-ranging aid and trade deals, including Sinopec's purchase of a 50 percent interest in offshore oil fields.

    Sudan: CNPC expanded oil production in southern oil fields, where Chinese production is scheduled to reach 500,000 barrels per day in August.

    Iran: Chinese firms signed numerous contracts to co-produce oil and natural gas. Iran is China's largest single source of foreign oil, providing 13 percent of China's total annual imports.

    Saudi Arabia: Sinopec reached agreement to explore and develop natural gas and oil in the Rub al-Khali desert and to build and operate social-welfare projects for the population of nearby cities.

    Central Asia: CNPC and Sinopec purchased major shares in oil ventures in Uzbekistan, Kazakhstan and Azerbaijan. Construction is under way on a 1,860- mile oil pipeline from the Caspian Sea to western China.

    Burma: CNOOC and Sinopec started large-scale oil development, following in the footsteps of CNPC, which had entered natural gas production a decade ago. Chinese and Burmese officials are negotiating to build oil and natural gas pipelines from northern Burma into southwest China.

    Indonesia: PetroChina and CNOOC purchased large stakes in Indonesian oil and gas fields. Liquefied natural gas shipments from the Tangguh field to southern China are expected to start in 2007.

    Australia: CNOOC purchased a stake in the North West Shelf liquefied natural gas project, co-operated by Chevron. CNOOC is in talks with Chevron for a share of the huge Gorgon LNG project.

    Venezuela: The two countries signed wide-ranging agreements for production of heavy oil in Venezuela's Orinoco Basin.

    Brazil: CNPC signed a deal with state oil firm Petrobras to cooperate on refining, pipelines and exploration and oil production projects. Sinopec Corp signed a preliminary deal to build a $1.3 billion gas pipeline.

    Canada: PetroChina, Sinopec and CNOOC signed deals for shares of Alberta's oil sands and for a pipeline to export crude oil extracted from there to the Pacific coast and then via tanker to China.

    United States: CNOOC is bidding $18.5 billion to buy Unocal.
    News source:
    http://www.sfgate.com/cgi-bin/articl...type=printable

    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  2. #2
    Join Date
    Jun 2005
    Location
    Whitby
    Posts
    95

    Default

    Hi Muppet,

    Thanks for posting the article. Not only do I love property but I also have a love of share trading (especially oil). Oil shares have been kind to me. I have made over $30,000 in the last 6 years due to NOG and Cue energy.
    When I was at college my economics teacher advised the class that we learn chinese as she believed China would one day be the worlds most powerful nation, Im constantly reminded of this through news articles like the one you posted - beware of the sleeping giant

  3. #3

    Default

    Hi Muppet,
    I have been involved in business in China for 17 years and have watched growth that is unbelievable.
    I have just started selling my first serviced apartments ( in Australia)which are situated in Rizhao city, Shadong province
    Do you think there may be an interest in N.Z??.Prices start at A$33,000 for a small apartment valued at around A$80k
    Thanks,
    John
    [email protected]

  4. #4
    Join Date
    Sep 2003
    Location
    High up above and deep down under
    Posts
    10,915

    Default

    Hi Suxxess

    In reply to your question, I don't know.

    I suggest that you could post the question in the Commercial Forum of Propertytalk and also try on the Somersoft.com and Propertyinvesting.com forums.

    Regards
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  5. #5

    Default

    Hi Suxxess
    There is no harm in trying, though I do feel your prices are a bit top heavy for 20 odd square metre apartments. Good luck!
    Todd Subritzky
    Sino-NZ Investment Group

  6. #6

    Default

    It is an interesting article, but does seem a bit one eyed. Lets face it China has no record of invading countries and taking what they want.
    One argument goes that the only reason the US caused the slaughter of more than 200,000 Iraqis is not to take the oil for themselves (they have immense reserves even by their standards of consumption) but to destabilize the region and in so doing prevent China from accessing it.
    Who knows what really goes on, the world can certainly be an ugly place at times.
    Todd Subritzky
    Sino-NZ Investment Group

  7. #7

    Default

    Anti-Chinese rioters on rampage
    Anti-Chinese rioters have torched and looted about 10 factories in southern Vietnam in the most serious outbreak of public disorder in the tightly-controlled country in years.
    Up to 20,000 people have been protesting over China’s deployment of an oil rig in waters of the South China Sea that Vietnam claims as its own.

    Associated Press reports the rioters attacked factories in a Singapore-run industrial park they believed to be Chinese but which were mainly Taiwanese-owned.

    Analysts say the communist government in Hanoi gave rare sanction to street protests as a way of amplifying its anger at Beijing over the oil rig that arrived on May 1 close to the Paracel islands.

  8. #8
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
    3,885

    Default

    Yup the Chinese and the viets are having fun with their shiny metal boats and lots of water cannons in the South China Sea.

    If I were China, I would
    1) print some money (since they are devaluing the Yuan to save their exports anyways),
    2) buyout every factory and business owned by Chinese nationals in Vietnam,
    3) get these factories and businesses to close down and fire off all the Vietnam workers
    4) watch Vietnam economy collapse
    5) watch Vietnam coastguard vessels retreat back to the ports
    6) wait for Vietnam government to come begging for help
    Last edited by PTILoveYou; 15-05-2014 at 01:52 PM.

  9. #9

    Default

    Removing China from Vietnam would be very popular with the Vietnamese and surrounding countries ready to invest there.
    Ironically a number of these factories were Taiwanese owned, the rioters having mistaken them for Chinese owned properties.
    Last edited by speights boy; 15-05-2014 at 02:28 PM.

  10. #10
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
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    Default

    Quote Originally Posted by speights boy View Post
    Removing China from Vietnam would be very popular with the Vietnamese and surrounding countries ready to invest there.
    Ironically a number of these factories were Taiwanese owned, the rioters having mistaken them for Chinese owned properties.
    I remembered that Indonesia used to purge their land of any Chinese, and lots of Chinese were killed in the process.

    So if they wish to kick out the Chinese (and Taiwanese), sure, go ahead.

    Now who is going to make their country rich?


 

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