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Royal Dutch Shell loses license on oil in Nigeria; China interested

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posted on Sep, 22 2006 @ 05:13 AM
I cannot find any English sources yet, but according to an Nigerian official Shell will lose its oil license for its seven or eight oil fields in the Nigerian Ogoniland.

Since their barrel output of crude oil is significant, it might cause an increase of the oil price.

Update: According to the same news source China would probably be interested in getting a license for the these particular oil fields.

I linked the story to a thread I made some months ago:

China cultivates Africa (Seattle Times)

I actually posted the hereunder stated text in another thread, but I think it actually needs an independent thread.

Today I was reading some new articles about the situation and its developments. Besides of the example I took, China currently applies its strategy on other African countries as well, such as: Zambia, Nigeria (which has one of world's largest oil reserves), Zimbabwe, Egypt, Sudan and many more. Apart from the few complaining about the long working weeks, most are quite or very happy, as China brings jobs, relatively cheap Chinese consumer products, and wealth to the countries.

The western companies slowly lose influence in Africa, and (Western) investment is being replaced by Chinese. The danger of this - besides the economic benefits for China - is that China builds both economic and social relationships with the African countries.

In contrast to the Western countries, China really brings wealth to the countries, which makes the African continent less dependent of the Western world, but the Western world will in contrast become even more dependant on the unstable Middle-East.

China's world domination and race towards the first place as super power accelerate in this way. What worries me, is the speed at which China expands. It seems to become every day more powerful, and we Westerners seem to lose power.

Especially as China's influence on the local governments (and thus ideologies) becomes bigger. I 've no intentions to compare China with Nazi Germany, but in times of crisis (compared to Africa's poverty) someone who promises to bring wealth (and actually does) is liked among the people, which history has proven might be dangerous.

Are the developments really dangerous, or is my fear ungrounded?

Originally posted by xpert11
How exactly would foreign ownership of the public work project benfit the local population ?

It would.

Lately, I watched a documentary on the Dutch television about Chinese 'intervention' in Africa. To keep the Chinese economic machine running large amounts of oil and other fossil fuels are necessary. 15 years ago, China was able to fulfill it's demand purely by domestic resources. Since the economy started to develop in such a tempo, the demand exceeded domestic supply.

One option is to purchase expensive fossil fuels from the Middle East producers, such as S.A., but China developed another strategy to fulfill its hunger for fossil fuels: Africa.

China has been lobbying with government of several African countries for quite some time now. Let's take Angola as example.
Angola, a country destroyed by civil wars, has large oil and diamant reserves, and is furthermore the 2nd largest supplier of the African continent. Poor governance and corruption made it impossible for Angola to build up a stable economy.

In 2004, Angola become the world's third largest supplier of crude oil for China (after S.A; Iran). Oil producing companies expect there are many unexplored oil fields in Angola, which makes it a great opportunity to invest in, and thus take the benefits out of it.

In exchange for fossil fuels, China invests large amounts in the Angolan economy, military, infrastructure, etc, by giving loans at a relatively low interest rate.

As well as indirectly (by the supply/export of fossil fuels) the Chinese economy also benefits directly. Chinese construction companies have been active in many infrastructure projects, such as building schools, bridges, roads, railways, low cost housing projects etc. After years of civil war, the country's once destroyed main railroad (Benguela railroad) has been repaired and is in use again. The railroad was rehabilitated by Chinese companies at a contract value of $300-500 million. Soon, Chinese companies will also start the construction of oil refineries. Several thousands of Chinese officials are expected to work in Angola, which automatically increases the Chinese influence and power in Angola, of which both parties benefit.

An additional benefit is that the supply of fossil fuels is not only based on pure business relations, but also on social relations, which is a great fundament in times of war, (in contrast to most western countries, that are dependant of the unstable Middle-East). Besides, this Chinese strategy decreases the level of Western influence in the African countries, a short-term is the example of Portuguese companies that untill recently did most of the construction works in its former colony, Angola, but now are replaced by Chinese companies.

If China applies this strategy on other third world countries, such as Nigeria, it could become a pretty dangerous situation for the Western world. Not in terms of military, but in terms of economy, as it slowly cuts off the third world oil supplies to the western world in this way.


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