Home | News    Saturday 18 November 2006

China’s Africa oil power bugs Western rivals

separation
increase
decrease
separation
separation

Nov 17, 2006 (CAPE TOWN) — China’s fast-expanding role as a partner for oil-rich African nations is rattling many Western companies, which are fearful of losing out and irked by the financial power their competitor offers.

China’s increasingly dominant presence in Angola and Sudan in particular has sparked concerns in boardrooms that the Asian giant intends to use its economic clout to monopolize oil and gas reserves in a handful of poor producers.

"Everybody is nervous about the Chinese," a U.S. oil executive who has worked in Africa since the 1990s said this week during the annual Africa Upstream oil conference in Cape Town.

"They have found a foothold and they have done it on their own terms. In 10 years they could be the biggest players in parts of sub-Saharan Africa," the executive said.

Western oil firms claim publicly they are not bothered by competition from their Chinese peers, who are still seen as being at a disadvantage in terms of the technology and expertise they offer in Africa.

But the bone they have to pick with Beijing is the use of so-called "soft financing" — the oil-backed credit and loans that come with few strings in comparison to financing from Western banks and international agencies.

ALARM BELLS

Alarm bells have been ringing since 2005 when China extended a $2 billion package of oil-backed loans to Angola, sub-Saharan Africa’s second largest petroleum producer after Nigeria.

China, the world’s fourth-largest economy and second-largest energy user, has since extended a further $1 billion to Angola, which is rebuilding its economy following the end in 2002 of a devastating 27-year civil war.

The financing allowed the Angolan government, which remains burdened by a reputation as a corruption-plagued former Soviet client state, to turn down a considerably more restrictive loan from the International Monetary Fund.

Critics also have assailed the Chinese for doing business in Sudan, treated as a pariah in much of the West for its handling of the conflict in Darfur. China is importing millions of barrels of oil from Sudan and selling Khartoum arms in return.

Others, however, downplay the threat that Chinese oil firms pose to the more established players in Africa, such as American oil giant Chevron Corp. (CVX.N: Quote, Profile, Research), which has extensive operations in Angola and other parts of Africa.

"There is no place where China has a monopoly on the oil game in Africa," said Duncan Clarke, chairman and chief executive of Global Pacific & Partners, an international energy consulting firm.

Although Clarke conceded that China’s use of "soft financing" was a concern to the industry, he noted that there were many companies, both private and state-owned, competing with the Chinese in countries like Angola and Sudan.

Facing mounting criticism in Africa — workers at a Chinese-owned copper mine in Zambia rioted earlier this year over pay and working conditions — China is trying to dispel concerns over its tighter economic links with the continent.

At a summit this month in Beijing, Chinese officials told African leaders the Asian economic powerhouse was committed to establishing a relationship that would help its partners in Africa grow and develop.

China-Africa trade is expected to top $50 billion this year compared to just $11 billion in 2000. In addition, Beijing has already cancelled $1.3 billion in African debt to back its offer of a friendly hand.

(Reuters)

Comments on the Sudan Tribune website must abide by the following rules. Contravention of these rules will lead to the user losing their Sudan Tribune account with immediate effect.

- No inciting violence
- No inappropriate or offensive language
- No racism, tribalism or sectarianism
- No inappropriate or derogatory remarks
- No deviation from the topic of the article
- No advertising, spamming or links
- No incomprehensible comments

Due to the unprecedented amount of racist and offensive language on the site, Sudan Tribune tries to vet all comments on the site.

There is now also a limit of 400 words per comment. If you want to express yourself in more detail than this allows, please e-mail your comment as an article to comment@sudantribune.com

Kind regards,

The Sudan Tribune editorial team.

Comment on this article


 
 

The following ads are provided by Google. SudanTribune has no authority on it.


Sudan Tribune

Promote your Page too

Latest Comments & Analysis


2015 elections are not a priority for Sudanese 2014-07-23 04:35:55 By Mahmoud A. Suleiman July 22, 2014 - This article comes against the backdrop of the news that reported the announcement of the National Elections Commission (NEC) that it had prepared the (...)

Bashir rests assured laden-burden on the Sudanese people’s shoulders 2014-07-14 06:09:16 By Mahmoud A. Suleiman July 13, 2014 - Omer al-Bashir believes that his continuing in power better protects him from tracking and prosecution by the International Criminal Court (ICC). He clings (...)

Lack of equity: A cause of many conflicts in Africa 2014-07-14 06:05:33 By Francis Ayul Yuar Nyok July 13, 2014 - It should be kept in mind that Africa crisis is not unique, more or less all the countries of the Sub-Sarah Africa are plague with acute poverty and in (...)


MORE








Latest Press Releases


Memory, healing and transformation in South Sudan 2014-07-23 05:55:08 Memory, Healing and Transformation in South Sudan A Working Paper by David K. Deng July 2014 Contents Introduction 1 What is memorialization? 2 Timing 2 Risks 3 Principles 3 Integrity 3 (...)

South Sudan: Independence Day marred by ongoing war crimes and looming famine 2014-07-09 01:39:56 AMNESTY INTERNATIONAL PRESS RELEASE 8 July 2014 South Sudan: Independence Day marred by ongoing war crimes and looming famine · Both sides to the conflict committing war crimes and crimes (...)

UN urged to probe alleged cover-ups and manipulations by its mission in Darfur 2014-06-26 05:40:52 Strengthen Peacekeeping Mission’s Rights Reporting, Civilian Protection (New York, June 25, 2014) – The United Nations secretary-general should investigate alleged cover-ups and manipulation of (...)


MORE

Copyright © 2003-2014 SudanTribune - All rights reserved.