CNOOC in Process of Joining Tullow‘s Turkana
China’s major oil corporation is planning to make major inroads in Africa to take advantage of the growing interest in the continent’s oil industry. According to The China National Offshore Oil Corporation (CNOOC) Chief Executive, Fu Chengyu, the company plans to capitalise on growing interest in the continent among explorers due to high oil prices and growing energy nationalism elsewhere. In Kenya, the company is seeking a stake in Tullow Oil, which is drilling oil in Turkana.
In the recent past China and Africa have strengthened their economic ties which has seen trade increase by 700 percent during the 1990s and over 2,000 percent to date. China is currently Africa’s largest trading partner, a move that has given the former a chance to control the resources in Africa at the expense of the West. The most sought for raw material from the African has been oil, and China has taken lead in the control of the scarce commodity.
CNOOC currently controls all the emerging projects in Africa and has managed to toss out European powerhouses including Shell-BP of Britain, Total of France and Kobil of the United States. Kenya has become the latest beneficiary of the battle heating up between the West, Japan and China for control of Africa’s economic landscape, raking in billions of shillings in new project finance and grant funds in the past two years.
Though China has been the more brazen hunter of opportunities in the country’s vast infrastructure and natural resources sectors, the scales have been tilting in favour of Japan in recent months as the Asian economic powerhouse unleashed its corporate giants for a piece of ?? CONTINUED FROM PAGE 23 the pie. However, with the support of their government, Chinese firms are making major and high strategic entries into East Africa, targeting the expected windfall in mineral extraction and consumer goods markets.
CNOOC, which is wholly owned by the Chinese government has established six business sectors ranging from exploration and development of oil and gas, technical services, logistic services, chemicals and fertiliser production, natural gas and power generation to financial services and insurance. The company first featured in Kenya in 2011 when it signed a $26 million (Sh 2.1 billion) exploration project in Northern Kenya, known as Boghal 1, in Isiolo.
Before then Kenya had searched in vain for commercial oil and gas deposits for decades in different parts both offshore and inland. Before then, CNOOC had also signed a production sharing agreement for Block L2 of Kenya’s offshore Lamu Basin in 2006 but just like Boghal in Isiolo did not yield much. In exploration terms, East Africa lags far behind the other regions with fewer than 500 wells, compared with some 14,000 in West Africa and nearly 20,000 in North Africa.
In the recent past, however, the region has produced positive results with huge deposits of oil found in both Uganda and Kenya. CNOOC has since partnered with Tullow Oil in the Uganda project and is in the process of joining the British firm in the Kenyan project in Turkana County. In exploration terms, East Africa lags far behind the other regions with fewer than 500 wells, compared with some 14,000 in West Africa and nearly 20,000 in North Africa.
PERSPECTIVE Chengyu told The People during a recent tour of the firm’s headquarters in Beijing, that many exploration firms see potential in East Africa, saying poor quality data collected in the 1960s and 1970s wrongly painted it as likely having some natural gas but little oil. The geology of East Africa is far more complex than in West Africa, experts say, and is only now being studied with the latest seismic and geochemical techniques. The region’s location near oil-hungry Asian economies is also a draw.
CNOOC Executive Director Wu Guangqi said: “We will work closely with our colleagues to realise a winwin cooperation functioning as a bridge between these two great countries.” When the State Council promulgated the Regulation of the People’s Petroleum Resources in Cooperation with Foreign Enterprises on January 30, 1982, CNOOC was incorporated and authorised to assume the overall responsibilities for the exploitation of oil and gas resources offshore China in cooperation with foreign partners, which in effect ensured the monopoly status of CNOOC in offshore oil and natural gas industry. CNOOC registered with a capital of RMB yuan 50 billion Sh 708billion) and currently has more than 98,750 employees."
(www.stockhouse.com Apr 9/13)