China a Leader in Scramble for Oil

China is fast becoming a major player in the world oil market. There is an editorial today on Financial times.com about China contemplating a takeover of US oil giant Unocal.

… Asia has suddenly accelerated its quest for energy security in recent days. Chinese oil companies are expanding their investment horizon to the point of weighing up the purchase of a US major, Unocal. India has followed China into investing in Iranian oil and gas. Both are vying for a piece of Russia's truncated Yukos. And India has just hosted the first meeting of Gulf oil-producing and Asian oil-consuming countries.

It is not surprising that oil-poor Asia has become so energy-anxious. Its four big economies - China, Japan, India and South Korea - import 12m barrels a day, more than the US, and their import dependence is either higher or rising faster than the US.
…

This is old-fashioned mercantilism. But if it leads, for instance, China to bid for Unocal, why should the US object any more than it did to BP's numerous US purchases? Provided, of course, that China behaves like BP, and does not somehow attempt to use Unocal as its own private pumping station, taking it out of the market. – [emphasis added] - story - see also NEWS: Chinese Company Mulls Unocal Bid

This move comes on the heels of several other geopolitical moves moves by China.

For example …

They have signed energy deals worth $200 billion with Iran. China Rocks the Geopolitical Boat!

They have moved into the US sphere of political influence signing large trade deals with Brazil and Argentina and had talks with Chile and Cuba. China keeps rocking the geopolitical boat!


They have been courting Canadian oil companies. China Emerging as U.S. Rival for Canada’s Oil

They have strengthened their relationship with Venezuela. Had the European arms embargo lifted and negotiated military links with Russia as well as negotiating a trade deal with New Zealand. China and Venezuela to strengthen partnership

and

They have teamed up with Russia and Venezuela (perhaps as a challenge to OPEC?). OPEC's Days Are Numbered

Michael Ruppert on the FTW website speculates that the recent announcement from Russia to build their new pipeline to the pacific (so as to supply Japan and related markets) is a ruse to get Japan to pay for part of the pipeline that will eventually feed China rather that Japan.

No. There's something else moving under the carpet here. That was hinted at by Japan's reluctance to celebrate until Putin hit them with his investment demands.

This is far from over and China is far from out of the game. I would not put it past Putin to use it to buy time with the US while laying the seeds for a collapse of talks and construction down the road; say when the pipeline is built to the geographic point where it must either turn south or continue east. That's maybe 2-3 years away and in the meantime Putin's options remain open. Wouldn't it be nice to have Japan pay for that segment of the pipeline?

China would love that.

This is the end game of games. There are no rules. – story

All of these geopolitical moves have occurred during the last few months.

There is definitely a rush on for grabbing the last oil reserves on the planet and China is moving fast and furious while the US is bogged down in Iraq trying to take their share by force. The US is also at war with Europe (economically) trying to prevent the Euro from replacing the Petrodollar (see third post about Petrodollars in this thread).

So what do you think?

Is the US sleeping at the switch while bogged down in Iraq?

Is there some reason a Chinese oil company could not buy an American oil company in the land where the "free market" is worshipped?

Will China soon own an oil tanker named after Condi Rice?

.

China needs resources for sure and it's the ultimate irony that they continue to gain power and influence through the PURCHASE of resources.

I'll throw the question back at you Trudeau boy How did you feel about China's bid for Noranda Mines? The defunct Foreign Investment Review Agency (a Trudeau creation to hamstring American economic expansion in Canada) would have been a neat tool to use against Pierre's Red pals. Should we sell our resources (even unprofitable ones) to dictatorial regimes? It's not just the Americans who have to worry about this.

Originally posted by deevee
It's not just the Americans who have to worry about this.

You're right but then again Canada is resource rich so we don't have to worry as much.

I don't have a problem with a bunch of rich people from another country buying our resources if a bunch of rich people from this country can also bid on them or want to sell them.

It makes no difference which bunch of rich people own the rights, the factory, the resource etc. since it doesn't ultimately affect anything and the jobs will remain for those lucky enough to have one and the profits go to the wealthy few who never seem to have enough.

What I do have a problem with is how the resources are used and how they are manged.

When it comes to the natural resources of a country I think they should belong to the public "commons" and any profit should go into building infrastructure and be invested back into the community. But in a society that worships a completely twisted version of Adam Smith's theories... that idea gets branded as insane.

I agree that China is approaching the oil crunch in a much more sane manner than the Americans and may eventually end up as "king of the hill" long after our economies crash and burn.

edit:brain fart

[edit on 1/11/2005 by Gools]

I agree that China is approaching the oil crunch in a much more sane manner than the Americans and may eventually end up as "king of the hill" long after our economies crash and burn.

And just where the **** do you get that from? You come from the distant future? Open you’re mind, go outside and life the real world. There will be many alternatives in the future and we most likely will be leading the way with these technologies.

Michael Ruppert on the FTW website speculates that the recent announcement from Russia to build their new pipeline to the pacific (so as to supply Japan and related markets) is a ruse to get Japan to pay for part of the pipeline that will eventually feed China rather that Japan.

And don't we just love speculation? If anyone is in the position to overcome oil starvation with alternate technologies its Japan. These new patens whomever they are to be developed by will probably be sold for a very high price to fortunate countries thus ending their oil dependencies. Then all we have to worry about are hard core resources.
But this of course is just ‘speculation’ as tomorrow may brink nuclear war between the U.S. and Hawaii.


[edit on 11-1-2005 by ChrisRT]

It may be a lot of alternatives around but as long as our energy is managed by power hungry bureaucrats and rich oil companies I don't see anything happening any time soon.

Then we have the oil wars, are these to be fought by the sheer will of the superpowers.

China is becoming a force and a hungry oil cow.

Perhaps we will have to hurry up and get that middle east oil and Iraq under control.

It may be a lot of alternatives around but as long as our energy is managed by power hungry bureaucrats and rich oil companies I don't see anything happening any time soon.

Then we have the oil wars, are these to be fought by the sheer will of the superpowers.

China is becoming a force and a hungry oil cow.

Perhaps we will have to hurry up and get that middle east oil and Iraq under control.

That shouldn’t be a problem when people start seeing that trucks cant make it cross country and airliners cant make it from D.C. to Seattle because of fuel concerns... You'd bet your ass that there would be 'alternatives' popping up in waves out of nowhere.

Then we have the oil wars, are these to be fought by the sheer will of the superpowers.

All good and dandy but someone is going to see that these wars cost a hell of allot more then funding a great alternative that can be quickly developed for such money.
These current oil wars are probably to hoard some oil and keep it from others growing economies.

Perhaps we will have to hurry up and get that middle east oil and Iraq under control.

Are you joking? If we didn’t really care what others think then we would be pumping that stuff out by the millions of barrels... It's all probably part of a grand show. Do have confidence no matter what most of you conspiritists and others that hate their countries and do believe that when the time arises that this necessity will breed alternatives.

Would the Chinese be pissed off if America messes with iranian oilfields while defusing their nuclear facillities?

I have a little theory that China already supplied Iran with a few crude nukes to be used on saoudi arabia and iraqi oilfields kind of a NOT deterrent, No Oil Today....the second part of the theory is that this information was allowed to be leakerd to washington, So the American government can pretend it doesn't know and no economical sanctions against China have to be taken, bussiness as usual, but at the same time Iran would not be stepped upon...

Therefore I would expect rather millitary action to take place in Syria than Iran and surprise surprise, allthough I am willing to believe that Syria plays an important role in supplying insurgants with money/logistics/weapons it's very notable how the american and Israeli press the last two weeks seem to have suddenly shift the attention from Teherans nuclear ambitions to Damascus, perhaps to soften up the public and kinda building momentum for the inevitable....???

I bet a grand American cruise missile attack would provoke the theorised Hizbollah response against Israel, wich in turn would serve the purpose of some israeli hardliners that really concerned negotiations with the newly elected and seemingly moderate palestine president will lead to a peace with some compromises made and that is not according to their masterplan, Hamas likewise, they don't seem to want to accept a realistic peace that ensures decent place uinder the sun for both parties...


So, conspiricy theory dictates that a major "incident" will happen just before the peace agreements are about to be signed, we'll see....


[edit on 13-1-2005 by Countermeasures]

[edit on 13-1-2005 by Countermeasures]

Originally posted by Countermeasures
...
it's very notable how the american and Israeli press the last two weeks seem to have suddenly shift the attention from Teherans nuclear ambitions to Damascus,
...

I bet a grand American cruise missile attack would provoke the theorised Hizbollah response against Israel, wich in turn would seve the purpose of some israeli hardliners that really concerned negotiations with the newly elected and seemingly moderate palestine president will lead to a peace with some compromises made and that is not accoording to the masterplan, Hamas likewise, they don't seem to want to accept a realistic peace that ensures decent place uinder the sun for both parties...

I totally agree with the thoery quoted above. I thought the same thing when I saw the thread about the US warning Syria and then I saw this! Not sure about the source though. They've been wrong in the past but they've also been right on some stuff.

I think the timming will be shortly after the crowning of Bush 2.0. The election in Iraq is a joke and irrelevant IMHO.

The Chinese are going about getting control of oil supply in a much smarter way but I believe it is inevitable that a conflict between China and the US is in the cards. Be it by proxy war or direct confrontation. Especially if the US makes any move towards Iran and threatens China's supply.

Interesting times.

edit: brain fart

[edit on 1/13/2005 by Gools]

China has signed a deal for oil and uranium with Canada.

See NEWS: Canada Signs Energy Deals with China

And see why China holds all of the economic cards in my post on this thread...
POLITICS: The Shrinking US Dollar

China is positioning itself as the new superpower and directly challenging the US geopolitical agenda.
.

China may have a contract to buy these resources from differnet countires but the US has military bases along with American oil companies developing the biggest producing oil fields. We have bases in Saudia Arabia and Iraq. Chinas contracts with Iran will be null and void when the current regime is ousted. There is a big difference between having the physical control and military capability to get it to the market. The US military is in the position to control the majority of the worlds oil reserves. If I was China I would be nervous about the future.

I too believe that China and the US will battle over enregy. God help us all.

Here is part of an article I saw the other day:

USAF playing cat and mouse game over Iran
By Richard Sale
UPI Intelligence Correspondent
Published January 26, 2005


NEW YORK -- The U.S. Air Force is playing a dangerous game of cat and mouse with Iran's ayatollahs, flying American combat aircraft into Iranian airspace in an attempt to lure Tehran into turning on air defense radars, thus allowing U.S. pilots to grid the system for use in future targeting data, administration officials said.

"We have to know which targets to attack and how to attack them," said one, speaking on condition of anonymity.

The flights, which have been going on for weeks, are being launched from sites in Afghanistan and Iraq and are part of Bush administration attempts collect badly needed intelligence on Iran's possible nuclear weapons development sites, these sources said, speaking on condition of strict anonymity.

"These Iranian air defense positions are not just being observed, they're being 'templated,'" an administration official said, explaining that the flights are part of a U.S. effort to develop "an electronic order of battle for Iran" in case of actual conflict.

I remember when the China Rocks the Geopolitical Boat thread came up, the main issue was China meeting her energy needs. Potential conflict with the US was a side issue. Now, a month or two later with the US looking at Iran as the possible next target, possible conflict between China and the US over oil is suddenly the more pressing issue. Amazing how quickly things change.

China's vested interests in Iran may very well become the most volatile situation in the current global political climate if the US pursues an invasion of Iran. Luckily, China seems to be taking a fairly non-discriminatory stance in regard to obtaining oil. She doesn't care where it comes from, as long as it comes. I was actually relieved to learn of China seeking of oil from Canada and other nations/regions. This will hopefully lessen her dependence on the Iran oil deal and consequently lessen the potential for conflict with the US in the event of a US invasion. A successful Chinese bid for Unocal would actually be a stabaliizing development rather than a destabalizing one.

An interesting quote from the first "Geopolitical Boat" thread.

funnily enough China counts Isreal as one if it's most important trading and development partners.

They recently signed a 10 year development plan between the new nati0ons and have vowed to co-operate on terrorism matters etc

Obviously there's also a Chinese proverb for "Don't put all your eggs in one basket."

Other players are not sitting idly by...

It’s been nearly 20 years since US companies have been allowed to trade with Libya. The recent re-opening of this country to foreign oil companies has allowed the US back into the Libyan oil industry. An auction was held this past week for bids to oil rights.

In news out of Tripoli, the prospects for U.S. companies were looking up with Amerada Hess, Occidental Petroleum and ChevronTexaco, which won exploration contracts for 11 blocks in Libya.
…
Amerada was part of The Oasis Group, which once worked with the Libyan National Oil Co. in the prolific Waha Field.
Houston companies ConocoPhillips and Marathon Oil were also a part of Oasis.

The industry scuttlebutt is that the three companies could soon reach new terms to work in the Waha Field again.

Occidental won nine blocks by putting together bids with other energy firms, including Liwa of the United Arab Emirates, and Woodside Petroleum of Australia.
…
The government will auction oil exploration rights to another 40 blocks in February. Libya holds Africa's largest oil reserves, with an estimated 36 billion barrels.

U.S. oil firms win rights to explore Libya

The same story reports on five energy deals signed between China and Venezuela this past week.

Venezuela's state-controlled oil company, which has recently insisted U.S. companies offer better terms for energy projects, signed five energy deals with China National Petroleum Co. that were part of a broader trade negotiation between the two countries.
…
In Caracas, President Hugo Chavez and China's Vice President Zeng Qinghong were on hand to announce the trade and energy pact.
China National Petroleum Co. and Petróleos de Venezuela say they will conduct joint exploration in several projects offshore and in the Orinoco Oil Belt and Zumano fields.

Venezuela has also turned to Iran to help develop markets in Asia (i.e. China).

Venezuela has enlisted Iran's help to steer its oil exports to China and away from its traditional US market.

A team of traders from Petroleos de Venezuela, the state-owned oil company, is to be trained in London by Iranian advisers in how to best place oil in Asian markets, people close to the industry say.

The move is part of an effort by Venezuela, the world's fifth-largest oil exporter, to strengthen ties with China at the expense of the US, with whom relations are again becoming strained after a two-year period of calm.

Iran is Venezuela's closest ally in the Organisation of the Petroleum Exporting Countries, which has agreed to keep output quotas unchanged in the short term to support oil prices.

Iran to help Venezuela to sell more oil to Asia

So China, Iran and Venezuela are solidifying their relationships versus the US.

Libya’s oil rights auction has also benefited other players. Oil demand in India is also rising fast and they have secured access to Libyan oil. This is the first time an Indian oil companies sign a deal for foreign exploration and development and they will be bidding for more.

Indian Oil Corporation (IOC) and its partner Oil India Ltd (OIL) have won an oil block in Libya in the first-ever joint foray in oil and gas exploration overseas.

IOC-OIL won onshore block-086 in the highly prospective Sirte basin, officials in IOC said.

The two firms had last month forged an alliance for joint venture into oil and gas exploration and production in other countries.

Officials said IOC-OIL will bid for at least two out of the 40 licences Libya proposes to offer in the second round next month.

Indian Oil, OIL win oil block in Libya

In yet another deal signed this week, the US has secured access to Nigeria and Sao Tome’s oil resources. This is also the first time Sao Tome ventures into the foreign oil markets. I guess that American backed coup has payed off.

Nigeria and Sao Tome signed a landmark oil exploration contract with a U.S.-dominated consortium on Tuesday, marking Sao Tome's first steps into the world of big oil, authorities said on Tuesday.

ChevronTexaco has 51 percent of the equity, while ExxonMobil has 40 percent and Dangote Energy Equity Resources, a small Nigerian/Norwegian company, holds 9 percent.

A tiny and impoverished nation of 170,000 people, Sao Tome has been rocked by coup attempts and accusations of corruption as it prepares to become the latest African petro-state.

It is located in the center of the Gulf of Guinea, where several major oil discoveries in deep water over the last 10 years have turned it into one of the world's exploration hotspots. The United States hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, from 14 percent now.

Nigeria/Sao Tome Ink Oil Deal with U.S. Cos

But then again some people believe that Peak Oil is a myth and that the US invaded Iraq to bring democracy and freedom to the world.
.

Washington, DC, Sep. 16 (UPI) -- Saudi Arabia, long the largest supplier of oil to the United States, has cut U.S. sales dramatically and may soon no longer be among the top five largest U.S. suppliers.
Saudi Arabia cuts oil sales to U.S., ups China

Washington might be diversifying its oil resources to lesson the shocks they no are coming down the road when they invade Iran.

I wonder if Washington has its sights set on Saudia Arabia as well?

I doubt that China and the US will ever engage in a military war over oil. Far more likely is a financial battle. There is a precedence in history as this was the way that the Soviet Union was beaten in the Cold War. They were literally outspent in all of the most economically important departments. Resources are important but they can be marginalised as a weapon if monetary pressure is applied elsewhere.

Military action is much more dangerous to an economy and world politics doesn't tend to like it anyway. You only have to look at Iraq for an example. It was pressurised for almost 15 years with economic sanctions and it was only when they proved useless that military force was used. In the meantime it's economy was devastated and it's infrastructure reduced to rubble. When war came, there was hardly anything to destroy. Countries will always try to defeat each other economically before they resort to anything else. At the moment, China still trades with the US and there is no sign of this trade ending. This tends to point to stability in the near future at least. Although the American dollar may be weak at the moment, the Chinese Yen is a very weak currency. It literally has decades to go before it catches up with the US economy and the dollar

Quite simply, China isn't yet in a good enough financial position to fight that battle and by the time it is, the oil may have run out anyway.

Leveller, China has nukes with the missile technolgy to deliver them anywhere in america that it wants to. If China sees the US go into another country with large oil reserves it might feel that it has to attack. Just MHO. Right now China is funding our oil wars. It is a good deal for America, having your nearest oil sucking competitor finance your take over of the a major portion of the worlds oil reserves.

China actually doesn't use much oil when compared relatively to the West. She ranks about 18th on the list. China also doesn't historically import much oil, so she has evolved to be able to live without it in a big way without being reliant on imports.

The US uses 35.81 barrels per day per 1000 people whereas China uses 1.24 barrels per day per 1000 people. She currently produces 3,387 thousand barrels per day - more than enough for her needs. She is in fact, the 5th largest producer in the world.
Obviously, as China modernises, she will use more oil, but she is also the largest user of coal of which she has the largest resources. Her industry is geared up for this fuel type and she depends on coal rather than oil. She has a long way to go before she has to worry about oil resources as she is nowhere near as reliant on them as the West.

Originally posted by cryptorsa1001

I wonder if Washington has its sights set on Saudia Arabia as well?

You better believe it. It is the Islamic terrorist hotspot of the world, rich in oil, and holds great strategic value.

It will be taken by force if(or when) the House of Saud collapses. If that happens, the US will RUSH in, and occupy it. That would give the US almost all of the ME under it's control with Iraq, SA, Afghan, and perhaps Iran and/or Syria.

Leveller, China uses way more oil that it produces.

China, the world's second-largest oil consumer, has managed to set a new full-year record for fuel oil imports in just 10 months, a clear sign its appetite for refined oil products will continue unabated next year.

Full article here:

Originally posted by cryptorsa1001
Leveller, China uses way more oil that it produces.

You've got to remember that importation doesn't necessarily mean a lot. It's quite possible that China is saving her resources for later. People assume that just because a country imports now, it has nothing in reserve.

Look at it this way: when the Middle East is sucked dry, who is going to be the most powerful? The country that has imported it's oil and safeguarded it's own reserves or the country that has drained it's resources dry?