Tuesday, January 10, 2006

CNOOC:"It's a good deal,"


Yesterday, I reported the most cheering good news of the New Year in Nigeria, the $2.3B CNOOC is investing in the oil industry in Nigeria. The Washington Post has a very comprehensive report on it. The analysis of the investment by Peter S. Goodman and Justin Blum is worth reading and documenting. Because they included very important details of the energy crisis in the world caused by the war in Iraq and the desperation for more energy in America, Europe and Asia.

Saad Rahim, an analyst at PFC Energy, a Washington-based consulting firm says international oil companies think CNOOC is overpaying for the Nigerian oil field that has estimated proven reserves of over 620 million barrels of oil and about 3.75 trillion cubic feet of natural gas.


"If you're talking to one of the international oil companies, they view that as an overpayment," said Rahim. "But for the Chinese companies, because they've been tasked by the government to go out and get as much oil as they can, then the $2 billion isn't an overpayment in their eyes."


But Xiao, the Cnooc spokesman, does not think so.

"It's a good deal," Xiao said. "It adds to our reserves, and we paid an attractive price."

14 comments:

Black River Eagle said...

I found your post today while researching information about Chinese government and private sector investments in Africa. The link to your blog was directly from The Washington Post news article titled "CNOOC Announces $2.3 Billion Nigeria Investment".

Although increased direct foreign investment in the Nigerian economy is a good thing generally, I'm not so certain that CNOOC, a Chinese state-owned and controlled energy company, is the kind of business partner the people of Nigeria would want. For example, the fact that China's military, economic, and diplomatic support of the murderous Khartoum regime in Sudan is directly linked to Sudan's oil reserves and exports to China would probably not sit well with a majority of the Nigerian people, would it?

In other words, the genocide and ethnic cleansing we see taking place in Darfur and parts of southern Sudan today can be directly linked to China. The Chinese government and so-called Chinese private investors supply the regime of Omar al-Bashir with weapons (helicopter gunships and aircraft, heavy-duty automatic weapons, landmines, mortars and rockets, etc.), the Chinese military personell needed to train the Sudanese military and police how to use them, and loads of money in the form of revenues from oil exports and generous Chinese bank loans. The various peoples of the Sudan don't see any benefits or at best little from the money earned by oil exports to China and elsewhere by the way.

While you are busy thanking God for this announced CNOOC deal in Nigeria, be sure to ask Him what he thinks about China's complicity in the genocide taking place in Darfur and the rape of the Sudan.

Orikinla Osinachi. said...

If I am going to ask God about the righteousness of China, I have to ask also about the righteousness of America and Europe in the war in Iraq. Because, if you are condemning the role of China in Sudan, you should not make China the scape goat of America, Russia, Japan and other world leaders with investments in many troubled African countries. Including in Nigeria, where American and European multinational companies are very active and enjoying an economic monopoly that has done us more harm than good since 1956 to date. Where were you when the US, Britain and Russia were supplying arms to the Federal Forces of Nigeria for the decimation of my people the Ibos during the Nigerian civil war from 1967 to 1970 when over a million people died and I was a refugee child.

Black River Eagle said...

Good response. I figured that you would fire back quickly...:-)

In 1967 when the Biafra War in Nigeria was raging I was just a youngster preparing to enter high school. Americans during those years were glued to our TV sets and/or were out on the streets dealing with our own civil war (The Civil Rights Movement) and unjust wars in foreign lands: Vietnam, Laos, and Cambodia.

I remember seeing TV news reports about Biafra when I was a kid but it was a long time ago and unfortunately I don't remember much about that conflict. Americans (and other nationalities) during those years didn't KNOW much about what was going on in Africa and far too many sure as hell didn't care. Times have changed I would hope.

More about the CNOOC oil deal in Nigeria at my place in just a few minutes. Stay tuned.

Cheers.

Orikinla Osinachi. said...

Okay sir.

I have a lot to learn and your civil rights background would be beneficial in my lessons.

God bless.

Imnakoya said...

Great Post!

Oriki- I'm I missing something- Why all the excitement? The Chinese are no gods and are as corrupt and unscrupulous as we Nigerians. I saw your post at Jewel in the Jungle and here, and I couldn't help but chuckle. If you are expecting the Chinese to redeem and turn the Niger Delta into El-Dorado, then you are in for a shocker!

Nneka's World said...

Very interesting and nice post.
Hmm, will ponder about this and discuss this with my friends

Orikinla Osinachi. said...

When I take my goods to the open market, I am not going to discriminate against any customer as long as the customer is paying the right price for my goods. And when I return home and tell my family the good news that one customer paid over $2 billion cash to me to supply more goods, you know that family will celebrate and jubilate with me.

Any more questions?

Do you have anything against the Chinese?

Are you a racist?

Imnakoya said...

Haba! To be skeptical about the Chinese intrusion into Africa has absolutely no correlation with racism. Where is the connection?

Orikinla Osinachi. said...

Allright.

The more billions of dollars coming into Nigeria the better.

Black River Eagle said...

Good discussion. I like that last comment by Orikinla: "The more billions ($$$) that come into Nigeria the better". I'd like to say one more thing.

People within Nigeria and abroad will be closely watching what Chinese "investors" and Beijing's cadre of diplomats running around West Africa do and don't do like never before. That has to be a good thing for the people of Nigeria and people all across Africa.

I have nothing against the people of China due to my own experiences with them in the U.S.A. and abroad and the little bit that I have learned about their long history. I DO have a deep mistrust for the Chinese government, military, and certain shady business "figures" re: how they plunder the natural resources and commercial markets in various Asian countries and now in Africa (Nigeria excluded for the moment).

I plan to keep them (Beijing) squarely in my sights this year at my blog and in my mind... like White on Rice. Close.

I hope that this better clarifies my position and that there are no hard feelings between us re: China, just disagreements on issues.

Orikinla Osinachi. said...

Dear Sir,
You missed their conference call on this venture?

I suggest you call their spokesman and ask him some challenging questions on the critical issues of Chinese pursuits in Africa.

The Chinese are not "yellow" for nothing.

If Nigerians cannot be smart, then I would be disappointed.

Once beaten, twice shy.

I am not going to set Nigerian Internet Warriors on them. But, I am also going to be the watching them closely.

Chippla Vandu said...

I think it is a bit unfair for us to canonize the United States and Europe while demonizing China. China ignored the war in Sudan due to its oil interests. This was really bad and appalling—indicative of the fact that the Chinese Republic does not link human rights with trade or investments.

However I do not think American and European multinationals are any better in their operations in Nigeria. The oil-rich Niger-Delta region of Nigeria is a “de-facto” war zone filled with so much hunger, delusion and poverty. The government of Nigeria continues to subdue any form of opposition in this region.

I haven’t heard the voices of the American and European governments! Human rights, meant to be the pinnacle on which modern society is built, has become nothing but a political tool, the perceived absence of which is used to castigate one’s enemy.

China is certainly not Nigeria’s salvation. But the Shells, Chevrons and Exxon-Mobiles have fared very badly in the Niger-Delta region.

Orikinla Osinachi. said...

Chippla,
As I agreed earlier, morality should not be the yardstick in the consideration of this Chinese investment.

Nigeria needs more of such beneficial investments.

I believe in the great future of Nigeria and CNOOC's investment has long term benefits for the future.

Black River Eagle said...

Chippla, no one is trying to demonize China while canonizing the United Sates over this issue in my opinion. It's just "Spotlight on China in Africa" time, that's all. And it is about time if you ask me.

Orikinla, I did go over to the CNOOC Ltd. corporate site today (January 13th) to see if there were any updates on the Nigerian oil deal. In reading through the January 9th press release I saw reference to the conference call for investors and industry analysts. The press release was standard stuff however the size of the deep-water oil fields and the purchase price per barrel ($4.60/boe) paid by CNOOC Ltd. did catch my attention. The abbreviation "boe" designates "barrels of oil equivalient" for the uninitiated readers out there (ref: OilPatchUpdates.com).

What was also interesting for me at their website was the section titled "Environment and Society". Again pretty standard industry jargon with very little on the community development and support projects side but let's see how they do down in the Niger Delta. In comparison, Chevron Corporation (formerly Chevron/Texaco) website has quite extensive information about their CSR and Environment Programs around the world, and I also noted that Chevron Nigeria Ltd. was awarded the Nigerian EPA (Environmental Protection Agency) Award for Excellence in 1999 and again in 2002. No, I don't work for or consult for the big oil companies of the world. It is odd though isn't it, that this company could receive such a (presumably) prestigious award from an independent government agency for environmental excellence and yet at the same time be responsible for massive pollution, death, and destruction of communities in the Niger River Delta?

From all that I have heard and read about Royal Dutch Shell, Chevron, Total/Elf and other oil companies working down in the Delta one would think that the Nigerian government and especially the Nigerian courts would have sued these companies and forced them to cleanup their pollution and compensate local people for the misery and death that they have (allegedly) caused. I guess that this hasn't happened because the Nigerian government itself is a partner in joint ventures there and is equally responsible? Can the government sue itself?

From what I have heard and read online over the past year this crisis should be thoroughly investigated and prosecuted in a criminal court (the ICJ at The Hague, anyone?) with massive international media coverage. Why hasn't something like this happened up to now? Is Big Oil and Politics that powerful in Nigeria and elsewhere around the world? O.K., scratch that last question. I already know the answer to that.

Sorry if I am being a pain here but I want to drill-down to the facts about issues raised in our respective posts and discussed in the comment threads that have developed around them. This of course includes the great posts on the subject by Imnakoya, Chippla, Owukori, and Ethan Zuckerman.