• Chinese president meets Chinese, Nigerian businessmen

Chinese firm announced a $2.3 billion investment in a Nigerian oil field last month, President Hu Jintao warned that China has to rein in surging energy use that has made it one of the world's biggest oil importers. The Chinese are not alone in this predicament but the voracious appetite for energy in China and other nations with fast-developing economies, notably India, is one force propelling oil prices upward.
BC-China-Oil Hunt.
By Joe McDonald. AP Photos BEJ101, 102, 801, 802. AP Graphic CHINA OIL.
Foreign workers in Taiwan fight loneliness, exploitation in bid to improve
CHUNGLI, Taiwan -- Sanukorn Chanchana works 70 hour weeks at a minimum-wage job in northern Taiwan, but when his contract expires in May, he intends to sign up for another three-year stint far from home and family. Chanchana, a sturdy 48-year-old man from Chiang Rai in northern Thailand, is one of 300,000 foreign workers who have left behind grinding poverty -- and familiar surroundings -- for the privilege of earning $484 a month -- before deductions -- in Taiwan's booming economy. In Taiwan, as in other developed economies, they provide a significant boost to domestic industry by working in jobs that locals shun -- or accepting wages locals would laugh at.
BC-Taiwan-Foreign Workers. 900 words.
By Peter Enav. AP Photos TPE101-103.
--BC-Italy-France-Bank Takeover: The board of Italian insurer Unipol SpA on over the weekend approved a takeover bid by French bank BNP Paribas SA for Italy's Banca Nazionale del Lavoro SpA. The plan, announced Friday by BNP, provides for the French bank to acquire 48 percent of BNL. If accords totaling 4.29 billion euros ($5.17 billion) are completed by the target date of June 30, BNP would then launch an offer to buy the remaining shares and bring the total value of the deal to about 9 billion euros ($10.9 billion).
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Document APRS000020060205e225002ys

Coal City State: Things Are Getting Better
by Paul C. Nnaji

1,372 words

31 January 2006

03:06 PM

All Africa

AFNWS

English

(c) 2006 AllAfrica, All Rights Reserved
Lagos, Jan 31, 2006 (Daily Champion/All Africa Global Media via COMTEX) --
THERE is this saying that: Righteousness exalts a nation and sin is a reproach. When a righteous man is on the throne, the people rejoice. It is based on these premises, that I welcome the new development in Enugu State and the intending partnership between the state and Chinese investors. At least something good, something positive and something rewarding to the people are in the offing.
Democracy is all about the people. It involves partnering with the people in order to make the society better than we met it. It liberates and empowers the masses politically, socially, economically and otherwise. It comes with confidence and develops one's abilities to explore, exploit and expand. Who says our democracy is not yielding fruits?
Sometime in the first tenure of the administration of Dr. Chimaroke Nnamani, the then secretary to the state government, Mr. Onyemuche Nnamani, had led a powerful state delegation, to The Peoples Republic of China, with the sole aim of attracting investors to partner with the state to develop its huge deposits of lime stone, apart from coal, which the state had been known for. The state had earlier floated the idea of establishing a cement factory, which a site has been identified. And with this at back of their minds, the trip was embarked upon. Little did this delegation know that their visit would eventually materialize into a more concrete development to the state until recently?
Recently a Chinese trade mission from the province of Henan, in The Peoples Republic of China, was in Enugu State to explore the possibilities and opportunities of investments, and the state government were on ground to welcome them and in his welcome address in a state banquet, the governor through his deputy had this to say: "we have great potentials to partner with you to ensure mutual benefit. This is because you are coming here to invest and make profit which will, in turn, improve the welfare of our people."
Earlier on, the leader of the Chinese trade mission had acknowledged the great potentials inherent in our great country, Nigeria, in the areas of agriculture, aviation, oil and gas, telecommunications, textile, building materials, coal and cement, and others.
And accordingly, Mr. Jonathan Pang, the leader of the trade mission and the President of Link Global logistics in China, said: "We hope that through our hard work, we can make Enugu State a star in Nigeria."
Further more, he promised that; "we can link Enugu city and make it an international transit centre for cargo and passenger aircraft in Africa."
But the most interesting aspects of their mission was found in the statement made by Mr. Elvis Emecheta, the president Nigerian Chinese Chamber of Commerce and the representative of Henan Province, China in Nigeria, who said "I must emphasize that this delegation is neither here to buy nor sell. They want to bring investments in the form of capital to build industries and processing units and export to Europe to sell in markets where they already have monopoly. They are ready to commit their money into Nigeria."
Therefore, the import of this development is far-reaching to our country- Enugu State in particular, the entire east and Nigeria at large.
Also, this is a strong case for the proponents of decentralization of Nigerian state, because this has demonstrated that, states on their own could grow based on their own capabilities and capacities. Component states that made up Nigerian state should be encouraged and allowed to take initiatives that alleviate the sufferings of the majority of Nigerians. After all, fingers are not equal. Some must be ahead of others.
With this also, Nigerians could see that a state can be financially viable. By the time all these goodies as promised by the Chinese delegates begin to be transformed into realities; Enugu State will be generating huge revenues from their operations internally. The era of cap in hand, begging for allocation from the federal revenue board should be over. This actually, is a wake up call to all the Governors and the intending ones, now that the campaign for 2007 election is at the corner, that they must think and be creative on the best ways out of the wood for the impoverished masses of this blessed country.
Through doggedness and enterprises our states could be financially sound and independent.
For Akanu Ibiam International Airport, a saviour has come. I, for one I knew that the very day that our President, Chief Olusegun Obasanjo, during his state visit to the state, threw out a challenge before Governor Chimaroke Nnamani, that as soon as you can guarantee an airline that will ply from the airport five times weekly on international operations, that the deed has been done. Nnamani, I know, loves the state with a passion, and would likely go extra miles to achieve something to imprint his footsteps in the sand of history.
Currently, there is no direct air link between Nigeria and the Asian countries and this is one before us. Sure this is a threat to the big players such as Americas, Europe. In reality, this could be the true and genuine efforts to open up Nigerian economy for lively competition, as both Americas, Europe will be struggling to be relevant in the economy of the country.
I forsee another viable airport in the country aside from Muritala Mohammed International airport in Lagos. Nigerians, and mostly of Igbo origin, are scattered all over the world and would likely fly direct to the heart of Igbo nation, Enugu.
Apart from the preceding, there are other multiplier effects coming from the Chinese trade mission as they have equally promised to commit one billion dollars in direct investment to the development of industries and infrastructures in the country.
What of the employments that these operations will create? One needs to be in any of the human resources departments of a good company to appreciate this social malady. There is no gain saying that most Nigerians are under paid. Most also, could not get a permanent job. Today we hear of contract employments in big companies and banks, all because their is abundant supply of manpower. This is slavery of sort. Others have resorted to segregating and differentiating between first class degrees, second class upper and second-class lower. All points to the fact that supply out weighed demands. But with these proposed activities, surely, people will be gainfully employed.
Another vital sector that the Chinese team promised to invest on is agriculture. Agriculture should be the live wire of any nation except, perhaps, in Nigeria, where people in government pay less attention to the plight of the people they govern.
Therefore, going by the words of Mr. Pang, who said, "Enugu State is a potential investors' heaven because of its large available land and the forest areas. Enugu State is rich in land that will make it possible for the growing of agricultural products." We have good and fertile ground no doubt. Ugbawka in Nkanu East local government is known for rice farming, as well as Akpugo in Nkanu West. They all lack the finance and infrastructure.
The state should also, seize these opportunities to examine the true situations of Oghe cashew plantation of Ezeagu local government area, Adani Rice farms, Nsukka, the comatose Anambra Vegetable Oil Products (AVOP), Nachi, Udi, and indeed, every other agricultural firms owned by the state government, with the intention of privatizing or handing them over to these investors in order to revive and profitably operate them.
With the magnitude of expected investment accruing from this partnership, the state is set to be totally transformed and industrialized and could possibly, have a spilling effect on the state of the roads, railways, rural electrification and others, in the benefiting areas.
This has clearly shown that with the right policy in place, the right investment will flow in into the country. At this time of our development, we require selfless leaders that will continue to improve on the legacies being bequeathed on the state and the people will be better for it.
Document AFNWS00020060131e21v001ba
In Brief
2,027 words

26 January 2006

Business and Finance

BUSFIN

English

(c) 2006 Business & Finance Magazine.
In Brief
Buy4Now signs up US supermarket
In yet another move into the US "e-grocery" market, Buy4Now has signed a deal with New York-based retailer Waldbaums. The Irish online retailer announced on January 17 that it had entered into an agreement with the supermarket chain to provide an e-grocery solution to its customers. This latest development marks the third such deal Buy4Now has signed in the US in the last 15 months and positions the company as a significant player in the US e-grocery market. The year 2005 has been an exceptionally busy one for Buy4Now. On the back of its developments both at home and abroad the company has raised its year-end (March 31, 2006) revenue and profit expectations to Eur 5m and Eur 615,000, respectively - year-onyear growth of 45% and 287%.
Irish tech firms venture Eur 200m
Irish venture capital investment in technology firms in 2005 hit its highest level since 2002, a new report has revealed. According to the Ion Equity Techpulse venture capital survey, Irish technology firms raised close to Eur 200m in investment funding last year. The Eur 198.2m raised in 2005 is an increase of 18% on 2004 figures, and has not been seen in Ireland since the technology boom in 2001 and 2002. Telecommunications companies are the star performers in 2005, earning 49% of the total investment for the year and registering the largest single deal - the Irish Broadband investment, worth Eur 18m. Software firm Aepona, Amadeus Capital Partners and Trinity Venture Capital also had large investments in 2005.
Northern Irish broadband hits 100%
Northern Ireland has become the first region in Europe to provide broadband access to all its residents and businesses. Announcing the 100% broadband availability, minister for enterprise, trade and investment Angela Smith highlighted what a significant achievement this is for the region. Latest figures reveal that there are approximately 180,000 broadband subscribers in Northern Ireland, which has an overall population of almost 1.7 million. Some 27% of households have signed up for broadband, while 38% of businesses have subscribed to high-speed internet access, a spokesperson for the department of enterprise told ElectricNews.Net.
Volume growth in US mobile users
The US mobile phone market has more growth potential than the Russian market, due to recent penetration growth, according to Worldwide Mobile Market Forecasts 2006-2011, a study from Portio Research. It ranks world mobile phone markets according to their future potential growth levels. The fastest-growing markets are India, China, Brazil, Indonesia and Nigeria. The US is in sixth place, predicted to grow by almost 66 million users between 2006 and 2011.
Volume growth in the US is ahead of developing markets such as Russia, Pakistan, Mexico and the Ukraine.
Russia has had its rapid growth with the third-highest number of mobile phones in the world after China and the US. The report also forecast that the number of mobile users worldwide will reach 4 billion by the end of 2011.
Two Tribes Go To War
The battle of the DVD formats is coming to a climax, but who will be victorious? Charlie Taylor reports.
Sony and Toshiba are squaring up to decide who will win the format fight for the next generation of DVDs, but will consumers be the ultimate casualties? It's only been a few years since DVD became popular, yet it seems as though it may be on its last legs. The race to replace the technology is on, with rival manufacturers lining up rival "next generation" formats which offer better picture quality and greater storage space. However, the failure to reach a compromise between the competing camps means that some consumers may find themselves backing the wrong horse.
There's not many people prepared to stand up and admit that they were once the proud owner of a Betamax video recorder. While the format may have been superior to VHS, it ultimately failed to catch on with the public and ended up being consigned to the digital dustbin, along with the Segway and the Sinclair C5.
The demise of Betamax served as a cautionary tale. Not only did it prove that the best product doesn't always win, but it also showed that launching two incompatible formats at the same time is unwise.
In the battle between VHS and Betamax, rival manufacturers decided to leave it up to consumers to choose which format they preferred. VHS won by a landslide and it wasn't too long before it was impossible to rent or buy videos in anything but that format, which was bad news for anyone foolish enough to have bought a Betamax video recorder.
Now it looks as though history is about to repeat itself with both Sony and Toshiba going head-to-head with the forthcoming launch of competing technologies. Early forecasts suggest that although Toshiba's HD-DVD is likely to reach the market first and be less expensive than the rival Blu-ray disc, it will be Sony that comes out on top in the impending DVD duel.
What both formats share in common is that they will feature blue-laser DVDs, which are capable of holding far more data than existing red-laser discs. This is because the wavelength of a blue laser, which inscribes the data on a disc, is much shorter than that of a red laser, allowing the DVD writer to pack more information into the same amount of space.
The difference in storage space is significant: regular DVDs can hold around 4.7 gigabytes (GB) of music, movies, and other data. However, HD-DVD can store 15GB on a single-layer disc, and 30GB on a dual-layer disc, while Blu-ray manages a whopping 25GB and 50GB.
Both of the next-generation formats offer the same in terms of picture quality, but one key plus point for Sony is that as well as offering a disc that can hold more data than its competitor's, it comes backed by an overwhelming majority of hardware manufacturers, software firms and movie studios. While the likes of Sanyo, NEC and Microsoft have all come out in favour of HD-DVD, all but one of the major Hollywood studios are backing Blu-ray, as are Philips, Apple and Dell. Other manufacturers such as HP and Intel are opting to support both formats.
In addition to winning over the movie studios, Sony also has a number of game manufacturers on its side who have been attracted by Blu-ray's increased storage capacity and by news that the manufacturer is to include a Blu-ray optical drive in the forthcoming PlayStation 3 console. However, while analysts believe that garners hold the key to success, ultimately, it's television viewers who will decide which format survives. Consumer electronic companies are pushing punters to embrace high definition television (HDTV) and the current DVD format doesn't have enough storage space to hold a HDTV movie.
That may be one compelling reason that could lead consumers to switch but it's also where things could easily go awry for everyone concerned.
More and more online content providers are beginning to offer video-on-demand services, if these become popular, then there may be no need to use physical media to store content. Users will just be able to keep it on a hard drive or have it streamed directly to the desktop.
The introduction of Blu-ray and HD-DVD is likely to lead to customer confusion. In order to avoid this happening, the rival camps did meet up to try to reach agreement on a single format but neither would give ground and compromise. Despite this, both sides claim that while confusion is likely to reign initially, one format will emerge victorious within a short space of time.
"While there will be two competing formats on the market initially, we don't see this lasting too long because consumers will see the benefits of both formats and will make the decision themselves as to which one they want to support," said Nicolas Babin, director of corporate communications, Sony Europe.
Most consumer electronic retailers are also resorting to the old "customer knows best" tactic and intend to leave it up to buyers to choose which format they prefer. DSG Ireland, for example, the retail giant which includes Dixons, Currys and PC World, will be displaying players that include both optical drives.
"The ultimate arbiter about whether a new product or format succeeds or fails is the consumer," said Declan Ronayne, general manager, DSG Ireland. One thing's for sure, while both formats may offer significant advantages over traditional DVD, only the foolhardy would willingly bet their house on which "next-generation" disc is going to supplant it.
Charlie Taylor ([e-mail]) writes for ElectricNews.Net.
News digest
eBay profits up 36% - shares fall eBay posted healthy fourth-quarter results on January 18, but its decision not to raise its 2006 outlook led to a fall in its share price in after-hours trading, writes Charlie Taylor. The online auction site saw profits jump 36% year-over-year to $279.2m (Eur 227m)or $0.20 per diluted share during the fourth quarter. This compares with $205.4m or $0.15 a share for the same fiscal quarter in 2004.
However, financial analysts expressed disappointment at eBay's decision not to increase its forecast for the new financial year. The company's 2006 revenue growth outlook of between $5.7bn and $5.96n is lower than Wall Street estimates, leading investors to question whether the company's growth is maturing.
IT chiefs to cut telecoms costs Three-quarters of IT decision makers in Ireland have said their main aim in 2006 will be to reduce telecoms spending, writes Deirdre McArdle. That's according to a survey conducted by research firm !
Reach, which showed that the convergence of IT and telecoms is giving chief information officers some food for thought. In particular, the emergence of voice over internet protocol (VoIP) as an option and the continual increase in mobile services has fuelled interest in cutting telecoms costs. The convergence of technology and telecoms is also likely to have a knock-on effect on areas such as investment in hardware and software, the report found. Some 62% of respondents said investment in hardware and software will be a major priority for them in 2006. Security will continue to be a priority, with concerns over phishing and antivirus management driving spending in this area.
DSG Retail's Xmas stocking filler
The Irish operations of DSG International, which owns Dixons, Currys and PC World, outshone its counterparts throughout Europe in the second half of 2005, writes Ciaran Buckley. In the 28 weeks to mid-November, the consumer electronics retailer's sales in Ireland grew 22% to Pds43.8m (Eur 63.7m) and like-for-like sales increased 6%. DSG Retail Ireland has also released its Christmas trading figures, which showed that its sales in Ireland increased 40% between mid-November and the end of the first week in January. DSG International, the parent company of DSG Retail Ireland, said that group sales increased 2% over the holiday period. It said that holiday sales rose unexpectedly thanks to demand for products such as video games consoles, laptop computers and MP3 music players.
Yahoo and Intel miss expectations Yahoo and Intel failed to meet analysts' expectations in their latest set of financial results, writes Ciaran Buckley. Fourthquarter profits at Yahoo soared 83% to $683m, but the web portal missed analysts' expectations by a cent. In the comparable quarter, Yahoo had net profits of $373m with pershare earnings of $0.25. Revenues increased 39% to $1.5 bn, up from $1.08bn in the same quarter of the previous year. In its fourth-quarter earnings announcement, Intel announced a 6% increase in revenues to $10.2bn, up from $9.6bn in the year-ago quarter.
Profits climbed 16%, from $2.1bn to $2.5bn, with earnings per share of $0.40. The results fell short of the company's own forecasts.
Document BUSFIN0020060201e21q0000e

Guardian Financial Pages

Vodafone: Declining signals in a mobile market

Nils Pratley and Richard Wray

1,164 words

24 January 2006

The Guardian

GRDN

23

English

© Copyright 2006. The Guardian. All rights reserved.
The chart here illustrates one reason why Vodafone's trading statement today is also the first round of chief executive Arun Sarin's fight to save his job. It shows that most blunt of financial measures - a company's pure stock market value.
Vodafone was Britain's biggest company by pounds 100bn after it printed a tonne of shares to pay for Mannesmann of Germany in 2000. It is has since been steadily overtaken by BP, HSBC and, at the end of last year, GlaxoSmithKline. Shell is also bigger, but it is not shown because of having two classes of share.
The companies in the graph have long been regarded as Britain's "big four" and together represent 28% of the FTSE 100 index and 23% of the broader All-Share index. In other words, almost everyone in this country saving for a pension has a slice of their financial future wrapped up in these businesses. Failure by any is bad for our collective wealth.
Market capitalisation, of course, does not directly reflect the returns shareholders can expect from dividend payments, and Vodafone now offers the second-highest dividend yield among the big four. But that itself illustrates the scale of Vodafone's fall. Investors - yes, our pension fund managers - were paying nearly 400p a share for Vodafone in 2000 because they believed the company's mantra that being big and bold was the way to win. With the price at 121p, they now compare Vodafone to a dull utility to be judged on its cash flows rather than potential long-term growth.
It is smaller, nimbler businesses, such as O2 , that have delivered impressive shareholder returns. Vodafone, by contrast, seems overcomplicated, stuffed with "strategic" stakes in operators in overseas markets that seem to generate more problems than benefits. Years of relentless acquisition have made its tax position hard for outsiders to understand; in its last trading update, Vodafone said it faced a pounds 5bn bill that, while provided for, surprised City analysts.
Any chief executive would be under pressure in the circumstances, but Sarin, who arrived at Vodafone with the acquisition of Airtouch in 1999, the group's first big US deal, stands accused of failing to grasp the depth of investors' frustration. He became chief executive in 2003 on the departure of Sir Chris Gent and has stoutly defended the "One Vodafone" philosophy, while trying to placate shareholders with a 15% rise in the dividend and an extended share buy-back programme.
Neither action has been enough to remove the sense that Vodafone stands at a crossroads, and not just because a new chairman - Sir John Bond of HSBC - arrives in June. The three biggest problems relate to three of its four biggest markets: the US, Japan and continental Europe. Sarin's remarks on these today will be scrutinised closely.
1. US. While the US is predicted to be one of the fastest growing markets in the world, Vodafone does not have the leverage to buy control of its 45%-owned venture, Verizon Wireless. Neither is it likely to get shareholder backing to acquire a fresh position in the country after a disastrous tilt at AT&T Wireless two years ago.
According to research by the UK-based industry watchers Portio Research, the world's sixth fastest growing mobile market in the next five years will be the US, behind India, China, Brazil, Indonesia and Nigeria - growing by 66 million new customers to the end of 2011. But the price for that growth is rising. Later this year the US government will auction off licences for 3G spectrum and Vodafone's rivals suddenly have deeper pockets.
After a prolonged fight within Deutsche Telekom, the head of T-Mobile, Rene Obermann, was given the go-ahead to spend heavily on T-Mobile USA, formerly Voicestream. Analysts reckon its investment could top $10bn (pounds 5.5bn). Gearing up for the fight, Verizon Wireless has stopped paying dividends, which were worth an annual pounds 1bn to Vodafone.
But Vodafone cannot just sit on its stake because its partner has the appetite and rationale for expansion. Verizon Communications' merger with MCI has brought it an extensive list of big business customers and cross-selling opportunities. Selling Verizon Wireless to Verizon is the obvious solution. Sarin appears philosophically opposed but, at the right price, most shareholders would applaud.
2. Japan. While Verizon Wireless is a good business that Vodafone is unlikely to be able to keep hold of, Vodafone Japan shows every indication of being a basket case that should be sold. The Japanese market is fast-moving, fashion-conscious and Vodafone just does not seem to be able to restore its rhythm after a disastrous start two years ago when rivals DoCoMo and KDDI launched new services that Vodafone was unable to match because it could not get any funky 3G handsets.
There has been a change of management, but recovery is slow. Vodafone Japan added 5,000 new customers in October, 57,000 in November and 64,000 in December. The November jump came after the introduction of new tariffs, but the December increase was less than predicted, as the competition counter-attacked. Any further setback in Japan would infuriate investors.
3. Western Europe. Competition is increasing across Vodafone's core markets, while regulators are demanding cuts in the prices charged to users of other networks and fixed lines.
The intensity of the battle in the UK market was highlighted yesterday as O 2 announced 895,000 new customers over the last three months of 2005 - well above expectations. Crucially, O 2 is also seeing fewer customers defect: new loyalty schemes cut contract churn to 27% from 30% and pre-pay churn to 29% from 37%. Later this week T-Mobile is expected to announce that it has also fared well in the UK, while, in the pre-pay market, 3 will today turn up the heat with a new cheap tariff. With its takeover by Spain's Telefonica concluded yesterday, O 2 is working on a product that will offer its customers a preferential roaming rate in Spain by the summer.
Meanwhile, Vodafone's Italian business is facing regulatory price cuts, while the mobile phone business of Telecom Italia has seen a successful launch of Tribu - the tribe - allowing cheap texts and calls to other members.
If it all feels like a sea of troubles, that is perhaps because Vodafone was built by acquisitions that had a flavour of opportunism rather than cold long-term calculation. Sarin's task was to make financial and strategic sense of those acquisitions. If it is mission impossible, investors will wonder whether Vodafone is worth more in pieces. It's also hard to believe that investors would want the same chief executive to lead a dismantling. Sarin has to produce evidence that his strategy can work, starting today.
guardian.co.uk/mobile >
Document GRDN000020060124e21o00004
China To Help Finance Nigerian Communication Satellite
87 words

23 January 2006

Satellite News

SATN

Vol. 29; Issue 4

English

(c) 2006 Access Intelligence, LLC. All Rights Reserved.
The Export and Import Bank of China announced Jan. 13 that it would provide $200 million in credit to Nigeria to support construction of the country's first communications satellite project, according to press reports.
The agreement with the Ministry of Finance of Nigeria calls for the construction of launch of the Nigcomsat-1 satellite aboard a Chinese Long March 3B rocket in 2007. The spacecraft, based on a Chinese platform, will provide telecommunications, broadcasting and broadband services to Nigeria.
Document SATN000020060123e21n0000i

Leading the News

China Will Strike An Energy Deal With the Saudis

By Shai Oster

805 words

23 January 2006

The Wall Street Journal

J

A3

English

(Copyright (c) 2006, Dow Jones & Company, Inc.)
BEIJING -- China and Saudi Arabia are expected to sign a wide-ranging agreement today on energy cooperation amid Beijing's quest to secure more energy resources vital to fuel its fast-growing economy.
China, the world's second-biggest consumer of oil, has been seeking to tighten economic and political partnerships with its major oil suppliers across Central Asia, Africa and Latin America. Its quest has taken on added urgency since 2004, when the country's oil demand surged about 15%, helping underpin the biggest rise in international oil prices in a generation.
Although the pace of increase in China's oil demand slowed last year, the average price it paid per 11,000 tons of imported oil surged 38% from 2004 as global oil prices hit record highs. China needs vast supplies of energy to fuel its economy, which grew about 10% last year. A key supplier to the country's fuel needs is Saudi Arabia, which accounts for roughly 17% of China's oil imports.
The Sino-Saudi memorandum of understanding is set to be signed during Saudi King Abdullah's three-day visit to Beijing, a Saudi official said yesterday. It will call for increased cooperation and investment between the two countries in oil, natural gas and minerals, but it won't specify any projects or dollar amounts, another Saudi official said. Other details of the agreement weren't immediately available.
King Abdullah arrived in China yesterday in the first visit here by a Saudi ruler since the two countries re-established diplomatic ties in 1990. He is scheduled to meet today with Chinese President Hu Jintao and tomorrow with No. 2 Communist Party leader Wu Bangguo and Premier Wen Jiabao. Chinese Foreign Ministry spokesman Kong Quan said last week that the Chinese and Saudi leaders are expected to discuss energy cooperation, fighting terrorism and telecommunications, among other issues.
King Abdullah's China visit is part of a four-nation Asian tour that will also include stops in India, Malaysia and Pakistan. Members of his delegation include Saudi Oil Minister Ali Naimi.
China's oil imports from Saudi Arabia have roughly doubled in recent years, from 12.5 million tons in 2002 to 22 million tons for the first 11 months of 2005.
Chinese and Saudi oil companies have already signed several deals. China Petroleum &Chemical Corp., or Sinopec, China's second-biggest oil producer by volume and its largest refiner, is drilling for natural gas in Saudi Arabia. The company also has signed a deal with Saudi Arabia's state oil company, Saudi Aramco, to build a huge refinery in the southern Chinese province of Fujian with Exxon Mobil Corp. as a partner. Aramco also has begun engineering work with Sinopec for a second refinery in China's northeastern port city of Qingdao.
The Saudi king's visit comes on the heels of a major diplomatic push by China in West Africa, including Nigeria, where Cnooc Ltd., China's largest offshore oil producer by volume, recently concluded a deal to acquire a large stake in an offshore oil field. Last week, Chinese Foreign Minister Li Zhaoxing traveled to Cape Verde, Senegal, Mali, Liberia and Nigeria.
China also has drawn closer recently to other large energy producers, such as Venezuela, where ties with the U.S. have frayed.
The agreement comes as renewed political instability in key oil-producing countries in the Middle East and Africa has pushed oil prices back up toward the record highs hit in the summer of 2005. On Friday, oil prices hit a four-month high of $68.35 a barrel, as traders worried that militants in Nigeria were targeting oil facilities.
Meanwhile, a political standoff between Iran and the West has oil traders nervous. The U.S. and several European nations have been calling for Iran to be referred to the United Nations Security Council over its moves to restart a uranium-enrichment program, a process that is used in producing nuclear weapons. Iran is the second-largest oil producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia. Some analysts worry that it could respond to possible U.N.-imposed sanctions against it with an oil embargo.
OPEC is scheduled to meet Jan. 31 to decide on its oil-production policy for the spring. A person familiar with Saudi Arabia's oil policy said Saudi Arabia and other OPEC countries don't support Iran's call for the producer bloc to lower the group's daily oil-production quota by one million barrels. Iran says the cuts are needed to prevent overproduction from glutting the market and bringing oil prices sharply down.
---
Tang Hanting in Shanghai contributed to this article.

License this article from Dow Jones Reprint Service
Document J000000020060123e21n0002a

Beijing, Saudis to sign broad energy agreement --- Nations to increase oil, gas cooperation; Abdullah in China
By Shai Oster

874 words

23 January 2006

The Wall Street Journal Asia

AWSJ

1

English

(c) 2006 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here http://awsj.com.hk/factiva-ns
BEIJING -- China and Saudi Arabia are expected to sign a wide-ranging agreement today on energy cooperation amid Beijing's quest to secure more energy resources vital to fuel its fast-growing economy.
China, the world's second-biggest consumer of oil, has been seeking to tighten economic and political partnerships with its major oil suppliers across Central Asia, Africa and Latin America. Its quest has taken on added urgency since 2004, when the country's oil demand surged about 15%, helping underpin the biggest rise in international oil prices in a generation.
Although the pace of increase in China's oil demand slowed last year, the average price it paid per 10,000 metric tons of imported oil surged 38% from 2004 as global oil prices hit record highs. China needs vast supplies of energy to fuel its economy, which grew at about 10% last year. A key supplier to the country's fuel needs is Saudi Arabia, which accounts for about 17% of China's oil imports.
The Sino-Saudi memorandum of understanding is set to be signed during Saudi King Abdullah's three-day visit to Beijing, a Saudi official said yesterday. It will call for increased cooperation and investment between the two countries in oil, natural gas and minerals, but won't specify any projects or dollar amounts, another Saudi official said. Other details of the agreement weren't immediately available.
"In many ways, China is trying to bypass the open market, by trying to broker direct agreements in production or trade around the world," said Matthew Yeomans, editor of Petropulse, a Web site about oil's impact on daily life, and author of a book on oil politics.
King Abdullah arrived in China yesterday in the first visit here by a Saudi ruler since the two countries re-established diplomatic ties in 1990. He is scheduled to meet today with Chinese President Hu Jintao, and tomorrow with No. 2 Communist Party leader Wu Bangguo and Premier Wen Jiabao. Chinese Foreign Ministry spokesman Kong Quan said last week that the Chinese and Saudi leaders are expected to discuss energy cooperation, fighting terrorism, and telecommunications, among other issues.
King Abdullah's China visit is part of a four-nation Asian tour that will also include stops in India, Malaysia and Pakistan. Members of his delegation include Saudi Oil Minister Ali Naimi.
China's oil imports from Saudi Arabia have roughly doubled in recent years, from 11.4 million metric tons in 2002 to 20 million metric tons for the first 11 months of 2005.
Chinese and Saudi oil companies have already signed several deals. China Petroleum & Chemical Corp., or Sinopec, China's second-biggest oil producer by volume and its largest refiner, is drilling for gas in Saudi Arabia. The company also has signed a deal with Saudi Arabia's state oil company, Saudi Aramco, to build a huge refinery in the southern Chinese province of Fujian with Exxon Mobil Corp. as a partner. Aramco also has begun engineering work with Sinopec for a second refinery in China's northeastern port city of Qingdao.
The Saudi king's visit comes on the heels of a major diplomatic push by China in West Africa, including Nigeria, where Cnooc Ltd., China's largest offshore oil producer by volume, recently concluded a deal to acquire a large stake in an offshore oil field. Last week, Chinese Foreign Minister Li Zhaoxing traveled to Cape Verde, Senegal, Mali, Liberia and Nigeria.
China also has drawn closer recently to other large energy producers, such as Venezuela, where ties with the U.S. have frayed.
The agreement comes as renewed political instability in key oil-producing countries in the Middle East and Africa has pushed oil prices up toward the record highs hit in the summer of 2005. Friday, oil prices hit a four-month high of $68.35 a barrel, as traders worried that militants in Nigeria were targeting oil facilities.
Meanwhile, a political standoff between Iran and the West has oil traders nervous. The U.S. and several European nations have been calling for Iran to be referred to the United Nations Security Council over its moves to restart a uranium-enrichment program, a process that is used in producing nuclear weapons. Iran is the second-largest oil producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia. Some analysts worry that it could respond to possible U.N.-imposed sanctions against it with an oil embargo.
OPEC is scheduled to meet Jan. 31 to decide on its oil-production policy for the spring. A person familiar with Saudi Arabia's oil policy said Saudi Arabia and other OPEC countries don't support Iran's call for the producer bloc to lower the group's daily oil-production quota by one million barrels. Iran says the cuts are needed to prevent overproduction from glutting the market and bringing oil prices sharply down.
"Most of OPEC, including Saudi Arabia, doesn't support cutting the ceiling at such high prices," the person said.
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Tang Hanting in Shanghai contributed to this article.
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