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.
