China and African oil
China invests heavily in commodities for over 10 years. It invests in iron, copper, timber, uranium, coal, cobalt, and many other African resources. But the first priority of China is always oil. It is therefore natural that Africa with its petroleum was the favourite’s continent for Chinese investment.
Africa, it is 54 countries, 30.2 million square kilometers, one billion people and is especially one tenth of global oil production and one third of Chinese oil imports. For China, Africa is both a market for its exports and an opportunity to diversify and secure its oil supplies.
I. China buys oil from Africa.
China has over 10 years signed contracts with all African oil producing countries: Nigeria, Algeria, Angola, Libya, Egypt, Sudan, Equatorial Guinea, Congo Brazzaville, Gabon, Chad, Tunisia, Cameroon, Cote d'Ivoire , Kinshasa Congo, Mauritania, Ghana, Morocco, Zambia, Somalia, Sierra Leone. It also signed with countries that do not have oil, but which produce "may be" one day: Kenya, Mali, Niger, Madagascar, Comoros, Ethiopia, Eritrea, Zimbabwe, Namibia, central Africa, Sao Tome Uganda and Senegal. Some of these countries are major producers and others will probably never produce a single barrel of oil, whatever happens the Chinese invest.
II. Do you know when the Chinese oil investments have started in Africa?
China signed its first contracts with Nigeria in 1997, one year before the oil price hit bottom at 10.8 dollars per barrel in 1998 and four years after China did not become an oil importer.
Since 1997, every hollow important barrel of oil, China buys new oil companies, oil fields and exploration licenses in Africa. No African country or company operating on the African continent is forgotten, as it is for a hypothetical million barrels of oil and one billion of oil reserves, only the number of zeros on the check varies 6-10. If the price of a barrel of oil drops, or if investors depressed, or if the banks panic and that oil companies are hurting and forgotten of all, when the Chinese oil companies are bidding for purchases of participations, exchange to oil companies and states suffocated by falling oil prices. Whether you're a small Canadian junior seeking funding for exploration drilling in the Sahara desert, a condition of Gulf of Guinea who sells licenses for deepwater exploration, whether you need 1500 km pipeline, an oil rig, a refinery, an oil platform in China says YES. It is facing monumental financial and technical challenges if it can lead to the production of oil.
When the world oil doubt, China buys. In February and April 2009 when I published my reports bullish on geothermal energy and oil, China's oil companies bought everything that had any more or less directly with the oil on the African continent.
At that time, Chinese companies have signed contracts with Nigeria, Ghana, Kenya, Congo Brazzaville, Cote d'Ivoire, Cameroon, Zimbabwe, Central African Republic, Djibouti...
Chinese companies bought Canadian junior with African oil fields, exploration licenses in Africa and made a proposal of 10 billion dollars to an English junior.
Then when the price of oil is high, China does not sell anything. With the approach of oil peak production and its growth, it has no reason to do so, its goal is to secure its supplies do not capital gains.
China is content to limit his purchases and waiting patiently to buy a new low again.
Dr Thomas Chaize