Name: GuoXiaowei Student ID:s07343
Research paper supervisor:Dr.Seku Conde
Minzu University of China
2007-2008 Academic Year
 
Abstract:
During the past years, the oil trade is an important part of Sino- Africa trade. And it won’t change in the future. Africa, with huge amount of potential oil, was regarded as the Second Gulf. The well relations of oil trade between China and Africa is not only very important to the development of mutual trade, but also conducive to resolve potential oil security crisis. The paper analyses the significance of Sino- Africa oil trade according statistics.
Key words: oil, African, import, cooperation 
 
Part I.  World Resources Background
According to the statistic from the BP Statistical Review of World Energy June 2008, the world’s primary energy needs are projected to grow by 55% between 2005 and 2030, at an average annual rate of 1.8% per year. Demand reaches 17.7 billion tonnes of oil equivalent, compared with 11.4 billion tonnes in 2005. Fossil fuels remain the dominant source of primary energy, accounting for 84% of the overall increase in demand between 2005 and 2030. Oil remains the single largest fuel, though its share in global demand falls from 35% to 32%. Oil demand reaches 116 million barrels per day in 2030 – 32 mb/d, or 37%, up on 2006. Global oil consumption grew by 1.1% in 2007, or 1 million barrels per day (b/d), slightly below the 10-year average. Consumption in the oil-exporting regions of the Middle East, Central America and Africa accounted for two-thirds of the world’s growth. The Asia-Pacific region grew by 2.3%, roughly in line with the historical average even though growth in China and Japan was below average, with strong growth in a number of emerging economies. Global oil production fell by 0.2%, or130, 000b/d, the first decline since 2002. Among the 10 members participating in production cuts, crude oil output fell by900, 000 b/d. Saudi Arabia’s output dropped by 440,000b/d, the largest decline in the world last year. Increased output in Angola and Iraq, and growing supply of condensates/natural gas liquids (NGLs), partially offset that decline.[1] Developing countries, whose economies and populations are growing fastest, contribute 74% of the increase in global primary energy use. China and India alone account for 45% of this increase. Organizations for Economic Cooperation and Development (OECD) countries account for one-fifth and the transition economies the remaining 6%. Developing countries make up 47% of the global energy market in 2015 and more than half in 2030, compared with only 41% today. The developing countries’ share of global demand expands for all primary energy sources, except non-hydro renewable. About half of the increase in global demand goes to power generation and one-fifth to meeting transport needs – mostly in the form of petroleum-based fuels.[2] That China’s energy needs will continue to grow to fuel its economic development is scarcely in doubt. However, the rate of increase and how those needs are met are far from certain, as they depend on just how quickly the economy expands and on the economic and energy-policy landscape worldwide. From the statistics, China’s primary energy demand is projected to more than double from 1742 million tonnes in 2005 to 3819 tonnes in 2030 and has an average annual rate of growth of 3.2%. China, with four times as many people, overtakes the United States to become the world’s largest energy consumer soon after 2010.[3] This chart is the imports and exports in 2007, which is the latest data also from BP Statistical Review of World Energy June 2008.
 
 
Imports and exports 2008
From: BP Statistical Review of World Energy June 2008
 

 

Million tones 

Thousand barrels

 
Daily

Crude Imports

Product imports 

Crude
exports

Product
exports

Crude  Imports

Product
imports 

Crude
exports

Crude  Imports

US

501.6 

  170.3 

    6.1  

63.0

10073

3560

123      

1316

Former Soviet Union

0.1

6.3

316.7

94.4

2

132

6360

1974

Middle East

5.8

9.9

859.5

115.7

117

206

17262

2419

North Africa

8.9 

8.5

135.5

   29.4 

   179

  17 8

2721 

  615

West Africa

3.4

11.2

234.3

5.9 

68 

   234

4706

123

East &Southern Africa

25.6

    8.4

19.2

    1.1 

   514

   176

385

    22

China

163.2

39.9 

3.6

15.6

3277

  834  

    73

326

China has already become the second largest country who has huge crude imports besides the US. 
 
Part II.  African Major Oil Producer Countries
Africa is now China's second largest source of crude oil, next to the Middle East. China imported crude oil from 11 African countries in 2005, primarily Angola, Nigeria, Sudan and Congo. Nigeria. A member of OPEC, Nigeria is the largest oil producer in Africa and the eleventh-largest producer in the world. The country is a major oil supplier to both Western Europe and the United States. The country produces roughly 2.5 million barrels per day. Nigeria's proven oil reserves are about 35.2 billion barrels and Nigerian government expands 40 billion barrels by 2010. Despite its resource wealth, more than 70 percent of the population lives in poverty. Angola, Angola is the second-largest oil producer in sub-Saharan Africa after Nigeria, with oil production expected to reach 2 million barrels per day by 2008. Angola also has major offshore sources of gas. The oil and gas industries have attracted over $20 billion in foreign direct investment since 2003. The Angolan economy is highly dependent on its oil sector too, which accounts for over 40 percent of gross domestic product (GDP) and almost 90 percent of the government's revenues. Angola accounted for half of China’s oil imports from Africa in 2005, according to the World Bank Sudan. Sudanese production and export of light, sweet crude oil—have risen rapidly in the last few years, with Sudan's Energy Ministry reporting production of some 500,000 barrels per day in 2005 despite internal upheaval, including the unrest in the northern region of Darfur. Sudan has proven reserves of some 563 million barrels of oil, with the potential for far more in regions of the country made inaccessible by conflict. Sudan is one of the world's poorest countries. Equatorial Guinea. This small West African country's has proven oil reserves about 1.28 billion barrels. Oil production averaged 371,700 barrels per day in 2004, with oil accounting for nearly 90 percent of the country's total exports in 2003. In October 2004, Equatorial Guinea told oil companies operating in the country to cap production at 350,000 barrels per day, for fear that ever-increasing oil revenues could destabilize the economy Gabon. Gabon has proven oil reserves of roughly 2.5 billion barrels and produces about 230,000 barrels per day. This represents a decline of 37 percent since its peak production levels in 1997. Exports of crude oil account for approximately 60 percent of the government's budget and more than 40 percent of GDP. Republic of Congo. As Sub-Saharan Africa’s fifth largest oil producer, the Republic of Congo has 1.5 billion barrels in proven reserves and averaged 235,000 barrels of crude oil production per day in 2004. In 2005, the oil industry accounted for about 80 percent of the country’s revenues, and nearly 90 percent of its total export earnings.[4] Here is the chart of total oil amounts that China imported from the countries in Africa during 2007. Angola is no doubt the first oil exporter to China, the total amount has topped almost 25 million tons in 2007. The second exporter was Sudan, has more than 10 million tons export amount.
 
 
 
2007 1---12

Total import amount of oil
(ton)

163,165,920

Angola

24,996,499

Sudan

10,306,048

Libya

2,906,872

Congo

4,801,420

Algeria

1,612,828

 
 
 
 
 
 
 
 
 
 
 
From: http://www.worldenergy.com.cn/
 
Part III.  Why and How China Present in African Oil Markets
Almost all the world is seeing the booming economy in China. China requires massive levels of natural resources to sustain its growth are no surprise at all. Although China has imported oil from the Middle East, the relatively low-cost and more proven oil reserves in Africa have attracted many countries, and so does China. China’s oil demand and its international dependency witness a continuous growth. In the recent years, with the soaring dependency on world oil import China has faced the same problem of oil security once encountered by the US, the world No. 1 oil importer[5]. China’s oil production will not largely increase with an estimated production of 180-200 mbbl in 2020 and a consecutive decline afterwards.[6] China depends intensely on the traditional oil producing area in the Middle East. However, this area is virtually under the absolute military control of the United States. Traditional oil producing area was dominated by Western, such as European, American and Japanese oil corporations. China, as a growing but new oil consuming state, is in a peripheral condition in this area, obtaining small share of the oil. The import diversification strategy became more and more necessary.[7]
NEW YORK (FORTUNE) - China, the world's second-largest energy consumer, and now imports about 28 percent of its oil and gas from sub-Saharan Africa, compared with about 15 percent for the U.S. In the past few years, China's leading energy companies – Sinopec, China National Petroleum Corp., and CNOOC --- have inked oil contracts from Equatorial Guinea to Algeria to Angola. The official exchanges were also quite often between China and Africa. In the last year, Chinese leaders have visited half of Africa's countries. During Chinese President Hu Jintao's African trips, he has visited Gabon, whose 1.4 million people could fit into a corner of Shanghai but which has more than two billion barrels of oil reserves. When China's Foreign Minister, Li Zhaoxing, toured [...]