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China And the U.S. Both Look at Ghana

Mercredi, juin 24th, 2009

Africa has been known for centuries as a poor continent and almost every picture of Africa has depicted abject poverty and hunger stricken sad faces of men, women and children. Yet there is now a crazy scramble for all that Africa has to offer, namely rich mineral resources and supplies of oil and energy. The US and China are both trying to woo African countries to ensure a smooth supply of oil. China was way behind in the development race but has caught up at an amazing pace to be a close second in terms of industrial growth and has begun to wield a considerable amount of influence globally. As the second largest producer of oil after the United States, it needs the oil resources just as much. The figures reveal that China got 9% of African oil exports in 2006 as compared to US getting 33%. The US gets double the oil that China gets from Angola, the second largest oil producer in Africa. However, China’s investment and assistance to Angola for the development of its infrastructure far outweighs what Angola gets from USA.

It has literally become a race for African favors in terms of resource supplies between China and the US. China is aggressively pursuing its investment and aid commitments towards Africa, accommodating its requests and pitching in whenever African leaders turn to it for support. It has cancelled African debt to the tune of $10 billion and has made a significant contribution to the growth rate witnessed by many African economies. The US has not yet displayed the same fervor.

The newest country to attract the interest of both China and US is Ghana. Both countries have been involved in oil exploration and large infrastructure projects linked to the energy sector. The US has a major stake in the West African Pipeline, and the project involves a sum of $ 700 million. China has funded the Bui Dam project by providing $600 million for generating 400MW of electricity that will benefit the local Ghana population.

Ghana is at the center of focus for both China and the US. It could benefit tremendously by this and pursue its agenda for development by keeping up the interest of both countries.

Source : Chinafrica

Tags: China, Ghana, oil, usa
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China Interested In Acquiring Stake in Swiss Firm to Get Oil from Africa

Vendredi, juin 12th, 2009

China has been pursuing its investigations and research for using its surplus cash reserves to secure its long-term sources of oil and natural gas crucial for its future growth and progress. Its favorable balance of payments position over the years has led to an escalation in its foreign exchange reserves to such an extent that it is considering multiple acquisitions, which will reap returns and at the same time secure its requirement for various resources. Besides its direct investment in oil and gas fields in Africa, China is now looking at securing investments in other western companies that have exploration activities in African oil fields. China has started preliminary talks with Addax Petroleum, which is a Swiss oil and gas exploration company based in Geneva. The Chinese interest has been highlighted by the newspaper, the South China Morning Post, and the Swiss major has also hinted at the likelihood of a transaction in the near future. Speculation about a Chinese take over has sent the company’s shares spiraling upwards by as much as 11%.

Various Chinese companies pursuing investment opportunities include Sinopec, that is, China Petroleum & Chemical Corp., which is the frontrunner with a bid of $ 8 billion. The China National Petroleum Corp., and China National Offshore Oil Corp., are considering bids worth $4billion for Kosmos Energy, a US based company, though they have expressed interest in a stake in Addax Petroleum as well.

Both these companies, namely Addax Petroleum and Kosmos Energy, hold something of interest for China, that is, they both have oil exploration facilities in West Africa. Addax has operations in Nigeria, Gabon and Cameroon, while Kosmos Energy operates the Ghana oilfields. Ghana offers a secure investment climate as well.

The talks are at preliminary stages, and Chinese companies are not the only interested buyers. But with their money muscle and ability to make a cash down payment, they might just emerge victorious. These Chinese companies are either state owned or have the government’s backing, making it easier for them to make their offer more attractive.

China’s interest in Africa is one of the most talked about issues all over the world. China has been providing aid and support to almost all the African countries and has also been doing so with no strings attached all these years.

Source : China Africa

Tags: Addax Petroleum, China National Petroleum, oil
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China Africa investment

Lundi, mai 4th, 2009

Over the years, while western countries were flourishing and spending freely, one country was quietly building up its reserves with its exports to the west, cautiously spending where necessary and saving whenever possible. This was China, one of the least affected countries in the global economic downturn, and the dragon has lifted its head to look around and find worthwhile investments all over the world to use up its $2 trillion of reserves, partially if not fully. The timing could not have been better as the worldwide credit crunch has brought down prices and great bargains are available to one who can make cash down payments. The head of China Investment Corporation, Lou Jiwei, is back in Europe with $200 billion wealth fund to buy assets, some of which were refused to his fund in 2008. This proved to be a blessing for his fund as it helped to avert losses for the Chinese.

Chinese oil companies are competing with their western competitors to gain rights to drill in new reserves of oil. A Chinese state owned oil company is trying to buy assets worth $5 billion in Libya and Sudan after the merger of Suncor Energy Inc with Petro Canada did not come through. The company in question is China National Petroleum Corp. one of the two top Chinese oil firms. The Chinese company, Sinopec has expressed its interest in acquiring large businesses in Africa along with South America. Similarly China’s state-owned company and subsidiary of china Minmetals Corp., Minmetals Development Co.

Ltd., is buying chrome assets in mines in South Africa, and is willing to spend up to $81 million on it. China has invested in getting land rights for agricultural purposes in sub-Saharan Africa as well. Its investments span over diverse fields and China is making its presence felt in all upcoming fields where growth potential is very high. China Mobile, the country’s largest telecom operator has been hunting for a partner to buy assets valued at $2 billion from its South Africa-based peer MTN. This is part of its overseas expansion exercise, which includes other countries as well.

Source : Suppliers Africa

Tags: Africa, agriculture, China, China Mobile, investment, Libya, oil, Sudan
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Libya to exercise right to buy Verenex assets

Mardi, mars 24th, 2009

Libya will exercise its right to buy the assets of Verenex Energy Inc., blocking a roughly US$400 million deal that China had sought with the Canadian oil producer, said the country’s top oil official.

Libya will match the amount that China National Petroleum Corp. had agreed to pay for Verenex, Shokri Ghanem, head of Libya’s National Oil Co., said on the sidelines of an energy conference.. Libya wants to buy the company out of « commercial interest » as it tries to boost its oil-pumping capacity, said Mr. Ghanem.

« There are some formalities we are working out, » he added, but declined to elaborate.

In a prepared statement Wednesday, Verenex said that « it is unable to confirm or deny reports » that Libya plans to buy Verenex. CNPC wasn’t available to comment.

Calgary-based Verenex Energy said in late February that CNPC International Ltd., a unit of CNPC, had agreed to buy the company for 10 Canadian dollars a share (US$7.88).

But a pre-emption clause in that deal gives the Libyan government the right of first refusal to buy Verenex’s assets, including its main holding, a 50% stake in an oil block in northwest Libya, an area rich in hydrocarbons.

Libya has the highest proven oil reserve in Africa, at 42 billion barrels. The country is hoping to raise production capacity to 3 million barrels a day from around 2 million barrels a day by 2013 with the help of foreign oil companies.

China had hoped to add Verenex’s assets to a hoard of others that state-run Chinese energy companies have been snapping up around the world in recent years to secure supplies for the country’s development needs.

Source : Konaxis

Tags: China, energy, Lybia, oil, petrolum
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China’s Investments in the African Oil Sector

Mardi, mars 10th, 2009

China has been waiting for an opportune time to spend its billions in cash reserves to secure its energy supply that is imperative for its further economic development. Chinese companies are building up their “strategic oil and gas holdings” in North Africa besides the Middle East. Proof of this lies in the acquisition by CNPC (China National Petroleum Corporation) of a Canadian company, Verenex Energy whose major activity is in Libya, a typical Chinese trait of grabbing every opportunity in this sector. CNPC is interested in the 50% stake that Verenex has in the Area 47 oilfield in northwest Libya, and also other similar assets in the vicinity. The drop in oil prices has had a negative impact on the price of oilfields as well. In Liberia, the Chinese have purchased iron-ore rights for $2.7 billion. The winning bidder is the China-Union Company that has a 25-year contract for exploring and mining iron ore in the Bong Range of Liberia. The deal involves a $40 million payment before initiating mining of the ore. South African raw chromite ore is also finding ready buyers in China. This is due to the growth in demand as a result of increased levels of ferrochrome and stainless steel production. Supply of chrome is relatively restricted.

According to Martyn Davies, the CEO of Frontier Advisory, African commodities are in demand in the first, second and third tier cities of China, and in return Chinese goods find their way into African markets. The Chinese strategy is likely to affect the current system of trading, as it is redefining rules and acquiring commodities at source, besides controlling the asset. According to him, he who controls the asset will control the entire market. This disruption from China will be complete in 10-20 years time, as they are likely to own the banking system as well as the mining companies.

China has been called a manufacturing vortex. But the manufacturing units need to be fed with power and raw materials continuously and consistently. This is the part that Africa can provide at lower rates at the present moment and for a longer period of time, keeping in mind the vast natural resources it has.

China Manufacturers

Tags: oil, raw materials
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Calendar

China And the U.S. Both Look at Ghana

China Interested In Acquiring Stake in Swiss Firm to Get Oil from Africa

China Africa investment

Libya to exercise right to buy Verenex assets

China’s Investments in the African Oil Sector