China looks for more oil

The growing share of imports in China's oil balance is a source of increasing concern to policy-makers in Peking. The government's response has been to try and secure as much crude oil as possible from foreign suppliers under long-term contract arrangements. To this end, it has concluded several deals: often on a government-to-government basis...Two of the latest deals have involved loans totalling $37 bn to Venezuela and Russia. The Venezuelan loan–amounting to $12 bn–is in return for a long term supply contract for up to 200,000 bpd of Venezuelan crude oil. Venezuela exported 129,000 bpd of crude to China in 2008. The Russian deal involves loans worth $25 bn made to an oil producer –Rosneft– and the national pipeline company –Transneft– in return for a 20-year deal to supply China with 300,000 bpd of oil from 2011. The oil is expected to come from eastern Sibe-ria. The arrangements involve the construction of a 40-mile spur line from the planned main export pipe-line from Eastern Siberia to the Pacific Ocean. The spur line will connect with a pipeline within China supplying the refining centre of Daqing, in the north-east of the country. The Chinese are reported to be discussing further large oil-related loan arrangements. The China Development Bank is thought to be willing to provide loans of up to $10 bn to the Brazilian state oil company, Petrobras, as part of a deal that could see the supply of 160,000 bpd of Brazilian crude to China.[Source]