Meanwhile, Here Are 20 Signs That China Is Cornering The Global Oil Market

[FarCenter]

Gus Lubin and Gregory White | May 28, 2010, 9:54 AM | 53 |

In response to the BP's Deepwater Horizon disaster, President Obama has launched a 6 month moratorium on new deepwater exploration contracts and other oil drilling restrictions.

But China isn't stopping.

Just this month, state-owned Chinese companies have signed contracts worth over $50 billion in Canada, Brazil, Argentina, Iraq, Venezuela, and Nigeria.

Most deal include an export clause, locking down energy supplies for the growing Chinese economy. If America's demand ever increases, these deals would present a serious problem.

And Beijing has no qualms about offshore drilling.



Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#ixzz0pETXaX1f

[leveymg]

1. Here are just the most recent deals in the Western Hemisphere>

ALBERTA CANADA (tar sands) - Deal signed May 2010: China Investment Corp. paid $817 million to take a 45% share of a Penn West Energy Trust project, worth up to 50,000 barrels per day. They also paid $435 million for a 5% stake of Penn West, according to Globe And Mail.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#13-billion-to-buy-45-percent-of-an-alberta-project-1#ixzz0pEZVGhwC

ALBERTA CANADA (tar sands) - Deal signed April 2010: Sinopec paid $4.65 billion for a 9 percent stake in Syncrude Canada, according to Globe And Mail.

Background: Syncrude is the world's largest producer crude from oil sands, and positioned to lead development of the Canada's Oil Sands.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#465-billion-to-buy-9-of-a-major-alberta-project-7#ixzz0pEcN1l8A


ALBERTA CANADA (tar sands) - Deal signed August 2009: Petrochina paid $1.9 billion for a 60% stake in two properties held by Athabasca Oil Sands Corp, according to Globe And Mail.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#19-billion-to-buy-60-of-more-alberta-projects-2#ixzz0pEaP83XV

VENEZUELA - Deal signed May 2010: China National Petroleum Corporation loaned $20 billion to PDVSA for development that will yield nearly three billion barrels of oil. PDVSA will repay the loan with oil.

In a side deal, China agreed to build three thermal power plants, according to The National.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#20-billion-to-develop-the-orinoco-belt-in-venezuela-14#ixzz0pEf1ZAXG


BRAZIL - Deal signed May 2010: Chinese state company Sinochem is buying 40% of the offshore Peregrino oil field for $3.07 billion. Statoil, the Brazilian energy company, will be beneficiary of the 40% purchase.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#3-billion-investment-in-an-offshore-brazilian-oil-field-5#ixzz0pEbDMd00

ARGENTINA - Deal completed May 2010: China National Offshore Oil Corp will pay $3 billion to buy Argentina's Bridas Group, giving it a 40 percent stake in Pan American Energy LLC, according to Business Week.

Background: China's new company owns 23 oil and gas production blocks in Argentina and Bolivia, and it may claim more through off-shore exploration. Argentina has failed to explore much of its long coastline and has relatively low production, according to NYT.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#3-billion-for-a-40-percent-stake-in-an-argentine-oil-company-6#ixzz0pEbYV8bG

RELATED

IRAQ - Deal signed May 2010: China National Offshore Oil Corp partnered with a Turkish company to develop Iraq's Missan field for 20 years. The syndicate beat all contenders with a bid to produce at $2.30 per barrel.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#majority-ownership-in-a-contract-to-drill-iraqs-lucrative-missan-field-12#ixzz0pEeXrbai


IRAQ - Deal signed October 2009: China National Petroleum Corp partnered with BP to drill Iraq's mega Rumaila field. They will charge $2 per barrel to produce 100,000 barrels a day. CNPC will also pay $15 billion in infrastructure improvements, according to Arabian Business.

Background: China agreed to write off Iraq's Saddam Hussein era debts by 80% earlier this year in an effort to smooth ties between the two countries. Now China is snapping up tons of Iraqi fields. Protecting the Rumaila field was the purported reason for Saddam's Hussein's attack on Kuwait in the first Gulf War.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#15-billion-to-improve-iraqs-rumaila-oil-field-plus-a-drilling-contract-10#ixzz0pEdfQxPA


IRAQ - Deal signed January 2010: PetroChina announced a 37.5% stake in a development of Iraq's Halfaya oil field. The oil field holds reserves of around 4.1 billion barrels, which PetroChina will produce at a cost of less than $1.75 per barrel.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#majority-ownership-in-a-dirt-cheap-contract-to-drill-iraqs-halfaya-oil-field-11#ixzz0pEeBmCr8




(LP GAS):

TURKMENISTAN - Deal completed June 2009: China loaned Turkmenistan $3 billion to develop its South Yolotan natural gas field, with various export guarantees. In a separate deal, Turkmenistan opened a new gas pipeline between themselves and China, which will deliver 40 billion cubic meters of gas per year by 2013.

Background: This amount is now more than half of China's yearly demand, which is only set to rise. China is now the key buyer in the region, rather than Russia.

Read more: http://www.businessinsider.com/20-oil-projects-now-owned-by-china-2010-5#3-billion-to-develop-a-turkmenistan-gas-field-4#ixzz0pEavTL4G

[JackRiddler]

2. A tragedy for China, going down a dead end.

I'm sure they have no qualms about drilling in the Marianas Trench, but that won't help them or us.

At this point in history, investing capital in oil is a waste and a tragedy. With the easily extracted stuff nearing an end, and with the planetary disaster of pollution unfolding, China has become just another oil junkie looking for the golden shot.

Increasingly scarce resources must be diverted to the development of solar, wind, efficiency, green transport (at least China's working on that), carfree cities and less energy-intensive farming (gradually, to the extent possible). Frivolous energy sinks like militaries, drug wars, twice-daily meat consumption and annual replacement of all of our electronic junk need to be scaled back.

There will no longer be any winners in the big game of RISK our demented leaders imagine they're playing. The paradigm of imperialism and territorial resource control died long ago, and the sooner we all depart from worshiping its zombie, the better for all.

That being said, your little cut-pasta editorial from "Business Insider" is more oil lobby scare-mongering designed to invoke yellow peril and brown-skinned enemies. God forbid "America's demand" for oil ever increases! God forbid China should have its cut of the diminishing oil flow. God forbid we should be learning any lessons in this of all moments, as we watch more and more of the ocean turn into lifeless sludge.

Drill, baby, drill!

[Statistical]

3. Even if the human race wises up it will take 20-30 years to make the shift.

In the next 20-30 years oil will become insanely valuable and China is locking down the global market.

Oil isn't a dead end. Even if tomorrow 100% of vehicles ran on alternate fuels, 100% of power came from non-fossil fuels, and 100% of heating was by geothermal heat pumps and solar heat oil would still be valuable.

At $300 per barrel it is still cheaper to make plastics from oil than any alternative.

Don't worry about China they also have setup a strategic stranglehold on Rare Earth elements which are required for high efficiency generators in wind turbines and electric motors in EV for example. They are also used in voltage regulators for smart grids, and in high density battery packs.

[JackRiddler]

5. Missing the point: There is no shift.

There is no shift. It's still mostly science fiction.

People talk, as you do, about the need to keep drilling for oil to meet energy needs while the shift happen, and that's where it ends. Oil is drilled and no shift actually begins.

A great deal has been developed on the margins, industries have started, but they are still starved of capital, and the shift is still treated like a beautiful pipe dream instead of the most urgent project in human history to avoid an imminent global disaster.

There is no shift, in part because the imperialist powers are still playing 19th century politics, jostling for advantage in the Scramble for Oil.

Even as China secures concessions - I guess we shouldn't have pissed off the world - the United States still has the energy at its disposal to begin the shift.

There will be oil enough for plastic even from the ground, if the shift is effected. The problem is energy - too much consumed for no good reason, not enough produced from sustainable sources. Fix that and there will be plenty of oil left for plastic.

That being said, if the US has any right to make use of foreign oil resources, then so does China. Do you deny that this is panic mongering?

Furthermore, to the extent that China is gaining some kind of deadly advantage in the game, it's because the United States blew its wad on illegal wars of aggression. That's where our trillions went.

[leveymg]

4. Perhaps. But, I would include the US in that Lose-Lose calculation.

Canadian tar sands, the dirtiest form of petroleum extraction (in CO release during extraction and refining) has become the single biggest international supplier to the US market. Looks like the Chinese are buying up a large part of that supply. Same with other western hemisphere sources. The Chinese are also the biggest developer of new Iraqi oil fields.

And, by the way, China also holds 85% of the world's wind generator production.

The U.S. is in major, major trouble on many, many levels.

[JackRiddler]

6. Are you complaining that the Chinese are less self-destructive?

Why does China hold 85% of the world's wind production?

Oh, because they must have invested in that.

So what the fuck is wrong with this country?

China's oil contracts may take oil away from the US, but its wind production is not a zero sum game. Nothing's stopping the US from starting on the same path.

Wait a minute, I gotta go make money spin on the casino. There are sovereign bonds to short, industries to cannibalize, wars to prepare for!

God forbid the United States should actually plan for the future and direct capital into intelligent investments. The market is a magic divine being that will guide us in the best of all possible ways.

[Statistical]

7. "Why does China hold 85% of the world's wind production?"

Got a cite for that?

US has more installed wind capacity than any other country.

[JackRiddler]

9. Ask leveymg, you...

Look at the posts in order. He said it. I was just throwing his statistic back at him, pointing out that wind is not some kind of zero-sum game.

Whoever the leader is, why is it still minuscule? Why can't a government that funds the Pentagon shift a hundred billion from that to develop wind right now?

If we're not willing to plan resource allocation as a people and stop worshipping the dead end of market economics, we deserve what we get.

[leveymg]

12. On edit - China presently has more than half the world's wind generator production, with capacity

doubling every year since 2005.

See, "China -Top wind turbine manufacturer in 2009?"
http://www.windfair.net/press/4193.html

[JackRiddler]

13. So what?

That's good news.

Now what's stopping the US from converting Detroit's giant shells into wind turbine factories?

Why isn't this a subsidized industry? Where are the priorities in allocating the capital.

The Pentagon, they get 700 billion for what? To destabilize some of the countries China's cutting contracts with, and see if their governments can't be turned by cunning or by force to return to the US fold.

That's our energy strategy. Sabotage and secure. Brought to you by Bush, still in effect under Obama.

[Statistical]

16. This is wind turbine factories.

All manufacturing is going to China for one reason and one reason alone: CHEAP ASS LABOR.

In terms of Green energy China is lagging.

http://en.wikipedia.org/wiki/Wind_power#Wind_power_usage

Installed capacity 2009
US: 35.1 GW
Germany: 25.7 GW
China: 25.1 GW

[leveymg]

18. Rate of increase is by far the fastest of the major countries.

The reason why manufacturing is increasingly in China also has to do with increasing Chinese ownership share of western companies and financial institutions, which is a force driving a bunch of business decisions, including where to locate production. If cheap labor was the only factor, everything would be made in Vietnam or Uganda.

[JackRiddler]

19. Many countries have substantial manufacturing bases, per capita...

You know them. Japan, Germany, etc. They even have export surpluses. And they're maintaining these through rational industrial policy. They actually decide where to stick (some of the) capital, for rational reasons, with the self-interest of the nation in mind, instead of leaving it all to Mr. Magic Market.

It's all about capital and resource allocation.

We don't leave it all to Mr. Magic Market, of course. Somehow we're able to subsidize a pointless military, and this is why we are the dumbest.

We could instead subsidize the energy conversion.

We could also raise labor standards around the world by imposing tarriffs inversely proportional to the average wage paid.

Human societies could start acting as though they were conscious, sovereign and intelligent, instead of at the mercy of anonymous market forces.

[leveymg]

21. You're right. But, you have to answer a question: why should the powers-that-be change?

Particularly, since there is quite evidently no proportional consequence for fraud, incompetence and failure at the top?

[JackRiddler]

23. Some of them because they're enlightened and it will be good for them too?

The rest because we sweep them the fuck out of power and expropriate their corporations by means of a peaceful, democratic and socialist revolution.

That's not an expectation or a prediction or a call to action or an assignment of probabilities.

It's how it will happen, if it happens.

If it doesn't, it doesn't.

[leveymg]

24. May that process of transformation start with Halliburton and BP.

If we don't start with them, it won't happen.

[Statistical]

22. US has the largest industrial base in the world.

However when a product becomes commodity it simply makes "sense" (from corporations point of view) to build it where labor is the cheapest.

Take GE for example. They are one of the largest wind turbine players. Most of R&D centers are here in the US however they are expanding their production in China. Why? Cheap qualified labor.

China on the other hand is a command economy so they can simply require national companies to ONLY have production facilities in China.

So factory growth in China is gaining from the dual flow.
a) western companies outsourcing.
b) chinese national comapnies forced to "stay put".

Still China is content to build turbines for other people and then burn coal for themselves.

[JackRiddler]

25. What's that look like per capita? What has been the trend?

We've got to stop looking at it from corporations' point of view, take away their power, and start making the decisions as an intelligent, self-interested, united people aware of the world situation and looking forward to the future with rational flexible planning that respects our many different interests and allows input from all, but lets nothing more get in the way of the energy and production and consumption transformation that we must undergo for the survival of our species and civilization.

Yeah, I know. American Idol, etc. Drill baby drill. Pretty funny.

[Statistical]

29. Looks even better on per capita basis and it has risen 30% over last 2 decades.

The idea that the US makes "nothing" is simply silly.

US industrial output has and is growing. The problem from a labor standpoint is that output is growing slower than productivity thus it requires less and less people to produce the same amount of goods.

On a per capita basis the US is roughly equal to Japan and substantially ahead of China.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

Industrial output
US: 2,696 billion
Japan: 1,240 billion
China: 1,208 billion
Germany: 840 billion
UK: 599 billion
Brazil: 595 billion

These 6 nations provide roughly half the worlds industrial output (14.9 trillion).

[JackRiddler]

30. This comparison is, you realize, based on an overvalued dollar

and it includes "our" leadership in the death industry and our enormous consumption of total junk that we throw away on a pile for no particular reason.


Given the space and resource advantage here, it's also the case that a lot of little countries are managing to do impressively more with less.

But I certainly don't want to deny US industrial power. On the contrary, I've been pointing out that the nation is still home to enough of it, and has enough access to energy, to stop pretending we're stuck and broke and gonna have to suck oil until we die. We have the power for a shift, and it's not happening beause of excuses and, above all, so that the present power elite can preserve itself.

Yes we can!

[Statistical]

31. So called "overvalued dollar" would have no effect on US/China relationship.

Chinese Yuan is pegged to dollar so if the dollar is overvalued by say x% then the Yuan is equally overvalued by x%. :)

"We have the power for a shift, and it's not happening beause of excuses and, above all, so that the present power elite can preserve itself. "

Who says we aren't shifting. US growth in renewable energy is at a pace that doubles every 3 years. Despite the hype from Europe we are well ahead of them in terms of emission free power (nuclear, hydro, solar, wind).

Economics will drive decision making in US.

As oil prices rise so do fuel costs and an EV starts looking cheaper and cheaper when you consider lifetime fuel costs of electricity vs gasoline.

[JackRiddler]

32. Doubles every 3 years - the growth or the sector?

Please clarify. Also, do you know how large the sector is as a whole?

See, "economics" is what has driven developments into the present dead end. Now you're saying wait around and watch how the market corrects itself. Wait around for projections to come true that the wind sector will keep doubling. Or not.

This is unreliable, too slow, and, based on experience, very likely to end somewhere that makes money for corporations, haphazardly allows some progress, and screws a lot of people. As usual.

It's not rising up to the task. It's also not acknowledging that capitalism got us into this mess, and it's insane to keep up our faith in it.

There are national projects that are considered worthy of mobilizing capital in a more conscious, planned fashion, such as destroying small nations in Asia. Or demonstrating to the Soviets that our rockets are good enough to put men on the moon.*

It's time to set goals like having the wind sector grow a couple of hundred times over the next 10 years, and to guarantee that the resources, labor, and energy are directed accordingly.


---


* Note. I notice your avatar. Please note, I'm an ardent supporter of peaceful space exploration and, eventually, colonization. NASA should be funded well and freed of its military missions.

[leveymg]

26. Most of China's production of wind turbines stays in PRC. They didn't start exporting until 2007.

But, already they've captured a major share of the world market, primarily because of cost advantage (cheap labor) and they can also cheaply self-finance their sales (good balance of payments and large capital reserves).

I wouldn't entirely agree that China is content to just export turbines and burn coal.

[leveymg]

17. Talking about wind generator machine production, not KW production.

China had more than 50 percent of wind machine production in 2009. Their annual unit output has doubled every year since 2005. Cited below,

[leveymg]

8. The Chinese have enormous capital reserves. We're broke and in hock. Why complain about that?

Just observing relative trend lines. Looks like US energy consumption is far less economically sustainable. Ecologically, China is a crisis on its way to being a human species-endangering catastrophy.

(On edit, China currently has something in excess of 50 percent of the world's wind generator production, with their production capacity nearly doubling every year since 2005) That, in itself, is not a bad thing (for China).

[JackRiddler]

11. Bullshit capitalist logic.

The US somehow manages to consume 25 percent of world energy like clockwork, and you call this "broke." There are 700 billion dollars a year for the Pentagon. There's bailouts for the banksters, and they're allowed to throw around trillions of dollars on speculative tricks that destroy countries. What has failed is capitalism and its system of finance that puts the capital in the wrong places. The US is only broke and in hock by the money standard. There are enormous real productive capacities being wasted. Capitalism is manifestly unable to direct these to constructive ends.

[leveymg]

14. I'm not arguing that point. What you're saying should be self-evident to any well-informed

person who doesn't have a commercial or ideological stake in deluding the public about that. What we have isn't capitalism in the classical sense, anyway, and hasn't been since World War One (if you want to get technical, the rise of state capitalism in the US started in the Civil War).

Whatever you want to call it, the system in the U.S. is no longer stable or self-organizing - it isn't even a "U.S. system," anymore.

[JackRiddler]

15. Not only should it be self-evident...

It should be the guiding concern. The US can still organize the Pentagon military system and sustain a bloated financial sector, so I don't buy the "we're done and helpless" argument. Worrying about what contracts China is getting is a very secondary issue. Changing the system of resource allocation in the US - restoring the power of a democratic people to self-organize - is infinitely more important and constructive.

[leveymg]

20. Military technology is one of the last areas the US has a competitive advantage

How that's used is as much a business decision as a political choice in the U.S.. It's an artificial distinction to separate the two. It's not so much "We're done and helpless", so much as years of poor choices have made us unable to effectively use the power and resources we still might have used to save ourselves.

I wonder if we've reached a kind of tipping point, and that decline is becoming a collapse.

[Catherina]

10. The point of this propaganda being what? That we not let them beat us in a race to death? n/t

[WinkyDink]

27. Oil, land/water/minerals all over Africa and S. America, ETC.

[Dont TS Me Brah]

28. all your wells are belong to us. nt