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Saudi Funded China Oil Reserve Project [Copy link] 中文

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Post time 2006-1-21 08:00:15 |Display all floors
A recent news item in Beijing Time reads in relevant part:

" VISIT to China next week by Saudi King Abdullah bin Abdul-Aziz is expected to give impetus to a deal to establish a multi-million-ton oil reserve base in south China, the Beijing Morning Post reported today.

At the end of 2002, Haikou Gaofeng Refinery signed a memorandum of cooperation with Saudi Arabia, which included an oil reserve project and a 6-million-ton refining project.

In negotiations last year, Saudi Arabia agreed to reduce its holding to 51 percent, the source was quoted as saying.

Saudi Arabia's plan to set up an oil reserve base in south China is expected to boost its sales in Southeast and Northeast Asia."

The advantage of having an oil reserve is obvious.  In time of war or embargo, the reserve would tide the nation over the period.  Both Japan and the U.S. have huge strategic petroleum reserves.

From the security standpoint, it can be claimed that it is actually better to have at least part of the reserves owned and funded by a major oil producer such as the Saudis.  In time of conflict, they can warn any third party against trying to attack or destroy the reserves (which belong to the Saudis, even though they are on Chinese soil), at the pain of getting an offset against the third party's holdings in Saudi Arabia. That should enhance the security of the reserve in times of military conflict.

Better yet, the concept should be pushed further, and China should invite the bigger oil producer nations to each keep a reserve in China, to serve the Asian markets.  Think about it - if the Saudis, Russia, Venuszuela, Iran, Sudan, etc. etc., all have their oil reserves on Chinese soil, the American majors would be fearful that they could be shut out of the lucrative market, and would beg to do more.

I do not know if a natural gas reserve can also be financially viable, in view of the costlier (refrigeration) facilties required.  If Australia would put up a natural gas reserve, it'd be even better.

[ Last edited by tongluren at 2006-1-21 09:27 AM ]

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Post time 2006-1-24 11:43:53 |Display all floors

A very good agreement! win-win

The Saudi needs to have security of market access to China.

But as any "sane" chinese Mandarin will see, Saudi, Kuwait, UAE is under the "squeeze of America".....or "under the gun"....

Do not import more than 20% from these states....

Alternative fuels, local supply, supply from LOGISTIC FRIENDLY states like Russia, Tartarland, Myanmar, Indonesia, Iran....

Don't get trapped.....

look at how silly Japan, Korea, Singapore and Taiwan.....greedy for American goodies....even to the extent of "prostituting themselves"!!!!!! ha ha ha

Green Dragon

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Post time 2006-1-24 11:56:48 |Display all floors

Nation signs oil deal with Saudis

By Qin Jize (China Daily)
Updated: 2006-01-24 05:59

China and Saudi Arabia signed five agreements yesterday, including one on increased co-operation in oil, natural gas and mineral deposits.

The deals were signed during a visit by Saudi King Abdullah bin Abdul-Aziz, 82, who arrived in Beijing on Sunday on his first official overseas tour since taking the throne in August.

Specifics of the oil deal were not immediately available.

The four other pacts covered a wide range of fields such as trade, loans and avoidance of double taxation.

President ^^  ^^ and the king oversaw the signing of the deals after an hour's meeting at the Great Hall of the People. Both sides promised to take advantage of their growing oil business to further develop a broader economic and diplomatic partnership.

"China is willing to improve the dialogue and the method of co-operation on energy with Saudi Arabia to raise the level of energy co-operation," Hu said, adding that closer co-operation in the fields of infrastructure construction and telecommunication is also under way.

Saudi Arabia is China's largest trading partner in the region comprising the Middle East and northern Africa.

Saudi Foreign Minister Prince Saud al-Faisal told reporters before the welcoming ceremony that China is one of the most important markets for Saudi oil.

Currently, the country supplies 14 per cent of China's oil imports, or 450,000 barrels a day. In the first 11 months of last year, China imported around 20.01 million tons of crude oil from Saudi Arabia.

The prince said the energy deal will set a framework for investment, but actual deals would have to come from companies. He added that extensive contacts exist between companies from both sides.

Abdullah's visit is the first tour of a Saudi king to China since the two countries established diplomatic relations in 1990. The visit has showed Saudi Arabia's emphasis on strengthening ties with China, Hu said.

The king is scheduled to meet top legislator Wu Bangguo and Premier & & today before heading for New Delhi.

(China Daily 01/24/2006 page1)

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