China’s CNOOC Eyes Big Deal In Africa

Lundi, février 22nd, 2010

China National Offshore Oil Corp may pay up to $2.5 billion for Ugandan assets owned by Heritage Oil Plc, reported Monday’s Reuters.

The sale process for the oil fields, which executives say contain around 2 billion barrels of oil, has been a competitive process between British, Italian and Chinese oil majors.

On Friday, Italy’s Eni SpA pulled out of a planned $1.5 billion purchase of Heritage Oil’s 50 percent share of Ugandan Blocks 1 and 3A — in which London-listed Tullow Oil Plc has preemption rights.

Tullow and Heritage control three oil blocks that cover the Ugandan side of Lake Albert, but the explorers lack the resources to develop the project alone.

Tullow has said it wants to sell the Heritage assets on to CNOOC.

Heritage Oil said on Monday it will receive $1.35 billion on completion of the sale of its Ugandan assets.

CNOOC said last week it aims to produce 275-290 million barrels of oil and gas equivalent (boe) this year, up from an estimated 226-228 million boe in 2009.



On The Eve Of The China Africa Business Summit…

Mercredi, octobre 28th, 2009

The world has for years been a spectator to the ever-strengthening relations between Africa and China. This relationship is going to hog the limelight in the coming week with the starting of the China Africa Business Summit in Cape Town on October 22nd, 2009. The Summit is going to see a huge turnout with over one thousand delegates from governments and business houses, and they will all gather at the venue of the summit, the Convention and Exhibition Center in Cape Town.

The Summit is of utmost importance for the two sides and for the whole world which is now being closely watched unlike the first Forum on China-Africa Cooperation (FOCAC) held in Beijing in the year 2000. Few had anticipated at that time how significant the relationship would turn out to be for the mutual benefit of both sides. Each meet of the Forum lauded the progress of trade starting at 10 Billion dollars in 2000, to $ 55 billion in 2006 to $107 billion now.

The Summit is the fourth FOCAC meet, with the second and third being held in 2003 and 2006. Africa’s biggest trading partner is now China, which overtook USA only recently. The continent’s largest economy South Africa has been seen its trade with China spiraling upwards. Ever since China’s biggest bank ICBC bought a 20% stake in South Africa’s Standard Bank, the continent has opened a world of opportunities for Chinese investors, since Standard Bank has made inroads into every part of Africa with a well-linked network.

Economists have been full of praise for China’s ability and willingness to fulfill every need of Africa, and start the process of development long overdue and initiate the infrastructure network crucial in every way. Thus it has kindled hope for nation doomed otherwise due to its human rights issues in the eyes of the Western nations, and given up on despite its rich natural resources. It is only China’s pumping of funds and pushing ahead with its agenda of aid without questions, that has woken up the Western world to the land of opportunity that Africa is proving to be.

Source : Business Africa



Women And The China Africa Relationship

Mercredi, octobre 21st, 2009

The significant China-Africa Women’s Forum 2009, which concluded on The 14th of October in Cairo, highlighted the need to involve women in the gradually strengthening Africa China relationship. Chen Zhili, the visiting President of the All-China Women’s Federation (ACWF), stated how her country and her organization in particular, had been trying to promote cooperation with all African nations in respect to women’s issues for the last five decades. The ACWF has been collaborating with African women’s organizations since the 1950s, which have picked up momentum after the Beijing Summit in 2006 of the Forum on China Africa Cooperation. African women have welcomed the moves of their Chinese counterparts and have since participated in various exchanges and cooperative endeavors.

ACWF is the largest women’s organization in China and has since 2006, increased the mutual visits exchanged by the women of the two countries. High-level delegations have visited many African countries to reach out to the local women. Thus they have established a network in 51 African countries and also provided loans through micro financing in 45 of these countries. In the two years between 2007-2009 China has provided funds amounting to 1 million dollars to 13 African nations.

The ACWF has been helping women by sharing the Chinese experience in dealing with poverty, rural development and empowerment to wives of African diplomats serving in China. Chinese universities are encouraging African women to enroll for higher education and are being sponsored by the government.

Besides the Chinese delegates there were 110 women from 29 African countries who attended the Forum. The concluding session reiterated their commitment to fight poverty and find ways to adopt the Chinese model of sustainable growth in their continent. The top priority would be to improve the standard of living of women in their countries. Both China and Africa have the largest female populations in the world, and every crisis affects women the most. The economic recession has affected the availability of jobs more, due to gender inequalities prevalent. Professional training and equal opportunities for them would help them tremendously, and stepping into the political arena would give them the power to participate in the decision making process of their countries.

Source : Business Africa



Dialogue Between Guinea And China For Investment In Resources

Lundi, octobre 19th, 2009

Guinea is a West African country known previously as French Guinea. Known for its rich reserves of bauxite, approximately half of the world’s reserves, it possesses around 25 billion tones. Other reserves include iron ore, uranium, gold and diamonds and a few other metals. Its regime has initiated talks with a China fund for investments in its natural resource exploration. This was stated by the country’s minister of mines, according to the Financial Times London.  Mohamed Thiam said that talks between the government in Conakry, the capital of Guinea and the China International Fund were likely to be concluded by the end of 2009. This would bring millions of dollars into Guinea for the development of infrastructure, creation of airlines, power generation, oil prospecting and mineral projects. The CIF would also join up with the Angolan state oil company, Sonangol for oil exploration in Guinea’s offshore blocks. The fund has already been interacting with the Angolan company since it has granted loans worth $9.2 billion, and is also the link between Sonangol and China’s Sinopec.

The minister was optimistic that his country would see over seven billion dollars of investment in the various projects initiated by the Guinea Development Corporation. His country has opted for the joint venture route instead of agreeing to give away natural resources in exchange for infrastructure development. This would lead to co-ownership of infrastructure projects, development of mines and natural resources and the country’s involvement at every step would prove beneficial in the long run. The deal would be the largest of its kind in Africa.

The deals would pitch China against western interests if it comes through at a time when there is a race for Africa’s natural resources. Guinea is under a military regime and facing worldwide criticism for its policies and crackdowns on the opposition. Threats of sanctions have kept the country on tenterhooks, and the added tension between different factions of the army, are all impediments to progress. A growing wave of discontentment has led to trade unions threatening a strike, which would only make matters worse on Guinea. The present deal would yet prove to be a lifeline if it comes through.

Source : Chinafrica



China Shows Substantial Interest In African Agriculture

Vendredi, octobre 9th, 2009

China’s involvement with African infrastructure and industrial development has been written about and discussed in every corner of the world, and there is no denying the fact that China’s advancement can be credited, to a large extent, to its oil sourcing from Angola, Nigeria and Sudan, and its minerals from Zambia, Liberia and South Africa. Whether this should be perceived as a resource grab, as many in the western world do, or be accepted as a compassionate overture, as China reiterates, is a matter of discussion. The latest in the series of its interests in Africa is agriculture, which again, is a topic of debate whether it is self-serving or concern based. Africa has the resources and potential to become one of the world’s prominent food grain suppliers. Yet it remains one of the largest recipients of food aid from global organizations. China with its increasing population of billons to feed plans to grow food in Africa using its own technology, labor and resources on African land and then ship back the entire produce. Would this agricultural development of Africa be treated as Africa’s progress for Africa’s benefit or for China’s benefit, remains to be seen. Its involvement on agriculture in Mozambique will serve as a prelude to things in store for other countries promising land for agricultural development to China. The Asian tiger promised $800 million for the modernization of agriculture in Mozambique, including the construction of dams and canals to divert water towards the highly arable land. Research by Chinese scientists continues in various institutes set up, again by the Chinese. The Africans are happy with the potential benefits of this rather than present ones. Reports by two UN policy centers reveal that only a few of these land leases are rent or fee based, the others are given in return of the hope for growth, development and employment. The development is taking place with Chinese contractors getting jobs to do and make profits in the process, while the local Africans end up losing subsistence farmland. China is certainly not growing food for the Africans, as is evident from the amount of rice that is being planted in the fields everywhere, since rice is not part of the African staple diet.

The Chinese perspective deserves a mention as well. There is no denying the fact that millions have been invested in “problematic” zones with no infrastructure or easy operations with no obstructions at every step. The same investment elsewhere would have borne fruit sooner and would have been hassle free as well. That it cares about Africa’s growth has triggered its interest and is making efforts to set up agricultural cooperatives, which does include local participation. Its rice growing interest may one day yield income from exports of rice to countries with huge demands of the grain. The world is too advanced to allow colonial kind of exploitation or one-sided benefits. China is positively giving some to get some and the same holds true for Africa.

Source : Business Africa



All of China’s Oil Deals In Africa Not Smooth Sailing

Mercredi, octobre 7th, 2009

African countries have had China’s participation in oil exploration operations for the last five years. But all is not well and China’s recent acquisition efforts have been running into difficulties. While some are facing vetoes there are others that have reached advanced stages of negotiation. For instance, in Nigeria, China’s state owned China National Offshore Oil Corp. (Cnooc) has reached advanced stages in talks about taking over blocks of oil exploration that are underutilized though owned by the Royal Dutch Shell and other companies. This was announced by Nigeria’s oil minister and a presidential spokesman. About 20 onshore blocks were at stake and the likely investment would be to the tune of several billion dollars.

This is sharp contrast to the fate of late stage negotiations of Chinese companies in Angola and Libya. In Libya, the bid of $462 million by China national Petroleum Corp for Verenex Energy Inc. Close on its heels was Angola’s state owned Sonangol wanting to stop Marathon Oil Corp.’s 20% stake in the oil fields to China’s Cnooc and Sinopec. The latter’s stand is the extreme opposite of the reception and preference Chinese companies received in Angola half a decade ago. Angola became China’s largest oil supplier in 2008 and Sino-African trade touched $106.8 billion.

The possible explanation for things coming to such a pass can be found in China’s grip too tight for Africa to handle. Moreover China has kept local recruitment levels low and has done little to increase employment opportunities or train the locals in their projects. Their policy of oil for infrastructure was welcomed initially but is now being spurned. The China Africa relationship is gradually maturing and as Africa moves higher up on the development ladder, it is being selective about its path. China is no longer the only country willing to pump in millions into Africa’s infrastructure. Western banks are again lapping up investment opportunities and fund requirements of African companies. The U.S. is also increasing its investment in oil and agriculture. Thus Africa’s need for China is gradually falling.

Source : Business Africa



China Looking Forward To the November China Africa Conference

Mardi, août 11th, 2009

The 4th conference at the ministerial echelon of FOCAC or Forum on China Africa will be held in November 2009.  China is looking forward to this conference so as to strengthen its presence in Africa. According to the Ambassador of China to Egypt, Wu Chunhua, China will be able to further expand its already existing presence in Africa. The 4th conference will be held in Sharm el-Sheikh, which is an Egyptian Sea Resort.

The conference is going to look at the last Beijing summit of Forum of China Africa in 2006 and evaluate what has been achieved till so far. The officials will draft a sketch for the coming 3 years. This was told by the Wu Chunhua. He added that Africa is a promising continent that has immense potential. A lot can be achieved by the trade relations. Any mutual ties between the two nations will bring positive results to both the countries.

The economists worldwide and the political spectators are establishing the fact that the continuous efforts of China in developing the industry and the infrastructure are finally giving positive results.

According to an African economist, China is making fantastic proposals and actually adding to the benefit of the entire continent and its people. It just doesn’t shed its money and look at the situation. China works a lot on the investments it makes. There are regular follow-ups and plans.

FOCAC was made after a proposal of over 40 countries of Africa and China in the year 2000. There are three levels in FOCAC. These comprise of the ministers discussion at the first level, followed by talks between the senior officials in the next level and then talks are held between the African and Chinese delegation to the respective countries.

China’s bilateral trade with Africa has been on a rise. In 1956 it was at a mere $12 million, but in 2007 it shot up to $736 billion. This made China the 3rd largest partner of trade with Africa. According to a forecast trade will become more than $10 billion by the year 2010. In 2007 a $9 billion financial package was signed between China and Congo. Later that year ICBC which China’s largest bank, bought 20% stake in Standard Bank. The value stood at $5.5 billion.

Source : Manufacturers Africa



Africa’s Growth Rate May Improve With China’s Rate of Growth

Lundi, juillet 20th, 2009

Africa is suffering from the worldwide recession and is likely to see growth rates that are the lowest in the last twenty years. After GDP growth rates of 6% and 5.1% in the last two years, the rate is expected to dip to 2 % in the current year. According to the chief of the African Development Bank, Donald Kaberuka, this however could be changed to levels before the crisis if China posted double-digit growth rates. This is because Africa is highly dependent on Chinese demand for African goods, a large chunk of which includes, raw materials, minerals and oil. A spurt in the Chinese growth rate would raise its demand levels and these in turn would lead to African growth.

While talking to journalists in Geneva, he said that China has been reportedly growing at 7-9% steadily, and this trend is likely to continue. In such a scenario, Africa’s growth is certain, linked as it is to China in more ways than one. China has been consistently securing its sources of supply for minerals and oil and has been pumping in millions of dollars into Africa for this purpose. China is also a major trading partner and has interests in education, health care and infrastructure development. But Chinese leaders have also been making a conscious effort to reach out to the poorest African countries, which do not have substantial mineral reserves to boast of.

China’s trade with Africa has increased by 45% in 2008, and the current year’s figures are being closely watched. Chinese aid is pouring in to Africa, but that of other countries has not been the same. Many countries decide on aid levels on the basis of the GDP level of the country. Hence, for Africa to keep up its developmental programs that are being funded by aid, it needs to have the figures to show. This may not be easy with the current economic slowdown and lack of demand from the western countries. China has pitched in where the west backed out, but the question is whether that much is enough for Africa. China’s growth rate alone may help boost the demand for African raw materials and this may elevate the growth rate somewhat.

Source : China Africa



Africa’s Potential To Feed The World

Mardi, juin 30th, 2009

African countries are increasingly in the news, and are gradually gaining recognition for the pace of development likely to take place there in the years to come. Delegations gather to discuss the future prospects of Africa time and again. African leaders participating in these meetings highlight the potential of their respective countries. A similar stance was evident in the recently held World Economic Forum on Africa.

African leaders feel that Africa has the capability of feeding not just its own millions but also the people of the whole world. While at present there are bad roads, unorganized markets, lack of appropriate measures, inadequate investment and cash inflow, but as things improve, the African countries will be able to produce enough to have adequate amounts of foodstuff to export to other countries which cannot expand their agricultural capacity primarily due to the shortage of arable land.

This stand taken by the leaders is a marked contrast to the ground reality witnessed by the world even as 300 million Africans sleep without food each night. The leaders support their claims by stating that Africa has the potential for reaping rich harvests with the minimal amount of investment, technical advice and increased rural incomes subsequently.

Africa consists primarily of small farmers and rural poverty can be alleviated only if they are empowered to change their techniques of agriculture. According to a World Bank Report, China has been found to have effectively reduced its poverty levels by fostering agricultural growth. The report states that agricultural growth was 3.5 times more effective in poverty alleviation as compared to growth in other sectors of the economy. The Chinese model would work to Africa’s benefit since it also has a vast agricultural population, which is seeped in poverty and no respite seems to be coming their way. The only solution may be replicating china’s agricultural model that will not just enhance production of foodstuff to feed its millions while leaving surpluses for exports, but also eventually find a way out of the vicious circle of poverty that all of Africa is caught up in.

Source : Agricultural machineries



The World Economic Forum And China Investment

Vendredi, juin 26th, 2009

China is not going to step back from the path of investment it has been following in Africa. This was stated by Jiang Jianqing, the President of China’s ICBC Bank at the World Economic Forum on Africa that took place in Cape Town last week. China’s investment into Africa will benefit both sides at a time when globalization is widening the economic horizons of all the countries, especially China which is pursuing investment opportunities all over the world.

Jiang Jianqing is co-chairing the 19th WEF meet that is discussing the issue of “Implications of Global Economic Crisis For Africa”. In this context, the President felt that the global financial system needed to be monitored diligently. This would avert crisis like the present one in the future. According to him, the global capital markets did not recognize national boundaries. The ICBC Bank has the distinction of being the world’s largest bank in terms of assets, and has also bought a 20% stake in South Africa’s largest bank, The Standard Bank. The two banks have been scouring the length and breadth of the African continent looking for appropriate investment opportunities. The two banks have already jointly short-listed at least 60 projects in Africa for making investments. Their largest combined investment is close to the signing stage, namely the $800 million funding of the Botswana power station. This would be a twenty-year commitment. Others include mining projects and those connected infrastructure development in many African countries. The alliance is of strategic importance for both countries since the ICBC is flush with funds and Africa has asset bases whose value is presently at their lowest, providing the golden opportunity to the bank to acquire a stake in them. Both sides stand to gain in the process, since ICBC Bank also cannot remain unaffected by the crisis and has had to scale back its growth figures. It is now looking for ways to make up and thereby show improved growth prospects in 2010.

The World Economic Forum on Africa and its focus on the financial sector has been an eye opener for the rest of the world as well. Optimism about the coming year helped the meet end on a positive note.

Source : China Africa