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9/5/11

China, Libya, and Oil: Update

China is positioning the country to engage with the new Libyan government, despite comments from at least one Libyan rebel that China might lose out for not being part of the forces backing the rebels. I doubt that will happen, and I predict that Chinese companies, which had signed some $18 billion in infrastructure contracts, will be actively trying to restart those projects and others. They will succeed in a lot of this. Reconstruction after all the NATO bombing will mean lots of new business.

About 75 Chinese companies operated in Libya before the war, involving about 36,000 staff and 50 projects, according to early Chinese media reports. Many of those firms were engaged in building roads, buildings and infrastructure.......China's top three state oil firms CNPC, Sinopec Group and CNOOC all had engineering projects in Libya, but no oil production yet, company officials said. China shipped in roughly 150,000 barrels per day of crude oil from Libya last year through Unipec, the trading arm of Asia's top refiner Sinopec Corp that holds the long-term supply contract. That amounted to about one tenth of Libya's crude exports.

China was unusually quick to support the [National Transitional Council] ...Relative to China's typical foreign policy response, that was quite important, but relative to what Europe and the United States did, that falls short. So I think they will struggle," said Ben Simpfendorfer, managing director of Silk Road Associates, a Hong Kong-based consultancy that specializes in business between China and the Middle East.

For more: China in Africa: The Real Story: China, Libya, and Oil: Update

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