China’s (Six Lane) Drive to Become a Leader in African Oil Extraction

Per a recent Energy Daily report, Beijing continues to pursue closer business and political relations in Africa as part of its strategy to become a leader in African oil extraction.  As the article notes:

“…China has committed $1 billion to the creation of a six-lane highway surrounding Nigeria’s de facto oil capital, Port Harcourt, the latest indicator of Beijing’s intent to become a leader in African oil extraction. The China Harbor Engineering Co. signed a deal this week with the African Finance Corp. for the 75-mile road that AFC officials said in a statement also would help improve other aspects of Port Harcourt’s crumbling infrastructure, such as electricity, and would “be a catalyst to the city’s economic development.”

The State Grid Corp. of China is also slated to play a role in improving the city’s and the region’s electric grid during construction of the road.

The agreement this week marks the latest effort by China to further its position in Nigeria’s troubled energy sector, which in recent months has slipped from the oil-and-gas-rich Niger Delta.

…Nigeria and China already enjoy strong relations in the energy sector. Beijing in 2006 bolstered those ties when it signed a deal for four oil drilling licenses in exchange for a promised $4 billion to be spent on power stations and a railroad for Nigeria.

Since then, Africa’s largest oil producer and the world’s fastest-growing economy have been steadily improving energy relations. According to Nigerian officials, bilateral trade has increased steadily since the beginning of the decade and tops $50 billion per year.

“…The addiction to oil is driving the foreign policy” in China, said Emira Woods, co-director of Foreign Policy in Focus at the Institute of Policy Studies.

But China’s growing stake in Nigeria has wrought concerns among some that its state-run energy firms will do little to help raise the majority of Nigerians out of abject poverty or diversify the country’s economy, 95 percent of which revolves around gas and oil.

“We haven’t seen any evidence of that happening in other countries where China is present,” Woods told United Press International, referring to Beijing’s petroleum ties to Sudan and Angola…

This entry was posted on Friday, July 18th, 2008 at 9:57 am and is filed under China, Nigeria.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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