Posted on 12/05/2004 11:11:04 AM PST by M. Espinola
This week’s map shows oil refineries in China. Refineries are sized by their refining capacity and symbolized by their owner. This map was created using POWERmap®.
In the next few years, China's oil refinery expansion may lead to an over-production of oil, which will cause a huge waste of money and resources, domestic experts have warned. Media reports show that many of China's coastal cities, including Dalian, Qingdao, Nanjing, Shanghai, Guangzhou, Fuzhou, as well as the southernmost island province of Hainan, are all enthusiastic about building or expanding their oil refineries.
In case these plans become reality, the net increase of China'soil refining capacity will reach 80 million tons, or one third of the country's overall oil refining capacity at present.
In Dalian, a port city in northeast China's Liaoning Province, two large petro-chemical companies plan to increase their capacity to 20 million tons and 10 million tons respectively.
One of the companies, the Dalian Branch of PetroChina, mapped out its expansion plan based on a proposed China-Russia petroleum pipeline project, which is still under negotiation. If the project fails to materialize, the expanded refinery will be left useless, experts said.
"The fast development of the national economy, especially the auto industry, has seen a sharp increase in the country's oil demand, thus stimulating oil production. But blindly expanding the oil refineries will inevitably cause a great waste of resources and money," a senior official within the country's petro-chemical industry said.
"Generally speaking, oil refining is a low-profit industry, and most international energy companies earn money mainly from the marketing sector. The cost of China's oil refineries is usually higher than that of their foreign counterparts, which leaves even less space to make profits," he said.
The coastal province of Shandong in east China is seeking central government approval for a project to construct a large oilrefinery base with a designed annual output of 10 million tons. "The project has attracted an investment of more than 1 billion US dollars and is expected to become a key motivator for local industrial restructuring." an official with the Shandong provincial government claimed.
However, the province already has more than 20 small oil refining companies in operation, that produce 16 million tons of oil products each year.
"These small oil refineries provide many jobs and also play important roles in local revenue. It takes time to have them all closed," a source with the Shandong United Petroleum Co. said.
Therefore, he said, it seems to be unwise for the local government to launch a new large oil refinery project at the very moment. ================================================================
DPA , SINGAPORE Sunday, December 5th, 2004
White-collar law enforcers have launched a criminal investigation into China Aviation Oil (CAO) after the jet-fuel supplier revealed a US$550 million loss from speculative trading, a statement said yesterday.
The police force's Commercial Affairs Department "has commenced investigations," it said.
The department is working closely with the Monetary Authority of Singapore and the Singapore Exchange.
A CAO spokesman said department officials had visited the company's premises.
"The company is currently assisting in the investigation," he added.
The investigation was initiated after Chen Juilin, CAO's suspended chief executive, said in court documents that the company's Beijing-backed parent sold a block of shares while knowing the company faced crisis-level losses.
Lawyers said the charge raised the possibility of insider trading. =============================================================================
MAINLAND CHINA FACTS: With 1.2 billion people, the People's Republic of China is the world's most populous country and third largest oil consumer, behind the U.S. and Japan. In recent years, China has been undergoing a process of industrialization and is one of the fastest growing economies in the world. With real gross domestic product growing at a rate of 7% a year, China requires increasing amounts of oil to sustain its economic development. Its oil consumption grows by 7.5% per year, seven times faster than the U.S.' Growth in Chinese oil consumption has accelerated mainly because of a large-scale transition away from bicycles and mass transit toward private automobiles, more affordable since China's admission to the World Trade Organization. Consequently, by year 2010 China is expected to have 90 times more cars than in 1990. With automobile numbers growing at 19% a year, projections show that China could surpass the total number of cars in the U.S. by 2030. Another contributor to the sharp increase in automobile sales is the very low price of gasoline in China. Chinese gasoline prices now rank among the lowest in the world for oil-importing countries, and are a third of retail prices in Europe and Japan, where steep taxes are imposed to discourage gasoline use.
I feel since the real cold weather had not hit the Northeast oil fell back & will drop a little further ...until..the first real ice cold day hits the Northeast and then the energy complex will begin to climb again. If there is a 'unexpected shortage' lets say in Jan-2005 will could very well be back in the mid-$50. A Washington showdown with Opec's number 2 exporter, Iran, will really jolt the oil markets and other markets world-wide contingent on how ugly it becomes. Some rumours state before March-2005 Iran has to be dealt with in terms of the nuclear weapons issue. What if the mullahs become really desperate and launch their missiles across the Persian Gulf at the largest of they Saudi oil fields? Just a thought. Being that China is still Red China, China Aviation Oil Corp will be covered by the government. Do you have the WSJ link?
I'd bet on a bounce tomorrow. Make a little money on that.
Asia Online
Michael Blackman
December 1, 2004
Fifteen years ago, Kazakhstan barely mattered. Then just how much oil it has became apparent. Most of its fields are yet to come on stream, but when they do, and assuming that a pro-Western Government is elected in Iraq that pulls Iraq out of the OPEC oil cartel, the pair will likely hold sway over enough oil supply to destroy the price setting power of OPEC, possibly heralding a long period of cheaper energy.
Kazakhstan remains a mystery for most. So, here are some basics: the country, which borders western China in its east and the Caspian Sea to its west, gained independence with the collapse of the Soviet Union in 1991. It's a big country: slightly smaller than India and more than five times the size of Thailand.
Its population, almost evenly split between Islam and Orthodox Russian, is a little over 15 million. Almaty, a city of around 1 million, is the largest and the commercial centre. Astana is the new administrative capital. Gross domestic product per capita is $US6300 ($A8038).
Corruption is a huge problem. Transparency International's most recent Perceptions of Corruption survey ranked it as one of the world's most corrupt countries. Even so, it has the brightest prospects among the five ex-Soviet Central Asian republics (the others are Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan). They have the corruption but not the resources.
Kazakhstan's Kashagan oilfield was discovered off its coast in the Caspian Sea only in 2000 and yet it is believed to hold about 38 billion barrels of oil, making it the second-largest field in the world and at least twice the size of all the North Sea oilfields combined. It is projected to have 13 billion barrels of recoverable oil given existing technology, and will come on stream in 2008. An international consortium of oil companies that includes Shell, Total of France, ConocoPhillips and ExxonMobil is spending $US29 billion to bring the field to production.
Kazakhstan's Kashagan oilfield is believed to be at least twice the size of all the North Sea fields combined.The Tengiz field is estimated to hold up to 25 billion barrels.
China is set to be one of Kazakhstan's big customers. It imported 8.3 million barrels of Kazakh oil in 2003, just a small fraction of the total imports of 637 million barrels, but that will change.
Beijing directed the Chinese National Petroleum Company (CNPC) to buy 60 per cent of Kazakhstan's third-largest field, Aktubinsk, in 1997. CNPC paid way above what was considered the market price for the stake.
Construction began last September on an oil pipeline to link China with Kazakhstan. China plans to spend billions on new pipelines to then convey the Kazakh oil to its industrialised eastern coast.
But Kazakhstan not only produces oil. It is the world's fourth-biggest producer of uranium, supplying about 8 per cent of world demand, and is a large agricultural producer.
So how is Kazakhstan governed? Elections were held in May for the country's largely toothless Parliament and even so, the vote was marred by fraud and election irregularities. But political killings are unknown in Kazakhstan and, more generally, human rights are observed more in Kazakhstan than in, say, nearby Uzbekistan and Turkmenistan.
President Nursultan Nazarbaev has ruled since 1991. His rule has been both corrupt and visionary. He has generally been pro-market and pro-business; the regulatory moves of his government have had a beneficial effect on the economy. And yet he stands accused of receiving tens of millions of dollars in questionable payments from foreign oil companies for which he is yet to provide sufficient account.
The country's debt was awarded an Investment Grade rating by Moody's Investor Services in April 2003, a rating two notches higher than Russia's and better than some US cities. Moody's commended the Kazakh Government for its "tight fiscal and monetary policy and improved banking system regulation and supervision".
Various IMF loans have been repaid ahead of schedule. There is a functioning stock exchange and laws require all trading in listed companies be done via the exchange. The banking system has been tidied up and is now relatively solvent and transparent.
The Kazakh Government has won praise too for establishing a national oil fund. The fund manages more than $US3 billion and is modelled on Norway's oil fund. But despite government assertions, it is not independently managed. The board of directors includes government members and members of the president's own staff. Guidelines about how the funds should be invested lack transparency.
Three steps forward and two back: that is how Kazakhstan is progressing. But it is progress nonetheless. Kazakhstan is a country to watch.
Chinese pop music blares from loudspeakers, mixing with the cries of Chinese traders at a busy local market.
Welcome to China? No, in fact, we are in Kazakhstan’s commercial capital, Almaty, at the Ya-Lian bazaar.
Since it opened in 1997, the Ya-Lian has become one of the city’s largest marketplaces, attracting thousands of shoppers to its stalls, which offer everything from household appliances and clothes to consumer electronics.
It is a scene repeated at hundreds of Chinese markets across Central Asia. Initially, the traders were locals bringing in scarce goods from just across the border to sell. But in recent years, they have been replaced by an influx of Chinese tradesmen who have set up more permanent shops and become a fixture of Central Asian urban life.
This street activity is just one sign of China’s growing presence in the region. But at higher levels, Chinese officials and business leaders have been crisscrossing the region, signing cooperation agreements and contracts that aim to expand Beijing’s foothold.
China’s interest in countries such as Kazakhstan and Turkmenistan is motivated to a large extent by its need for energy resources. China’s economy is booming, but its domestic oil and mining industries cannot keep pace with demand.
Chinese officials, as a result, have fanned out across the globe -- including Central Asia -- in search of suppliers, as Xu Yihe, senior reporter with the Dow Jones Newswires in Singapore, told RFE/RL.
"Chinese oil companies are almost everywhere in the world," Xu said. "They’re dispatching teams of oil experts to negotiate oil projects, especially upstream projects in Asia, the Middle East, Africa, and North America."
Those efforts are beginning to bear fruit. In May, after seven years of negotiations, China and Kazakhstan agreed to build a 1,000-kilometer pipeline from Kazakhstan’s central Karaganda region to China’s northwestern Xinjiang region by the end of 2005.
The pipeline will be a key link in a 3,000-kilometer project that aims to join China to the Caspian Sea. China has also offered to help Uzbekistan develop its small oil fields in the Ferghana Valley.
Chinese investment is also going into other energy resources, such as hydroelectric projects in Tajikistan and Kyrgyzstan, with scores of additional plans up for discussion.
Niklas Swanstrom is executive director of the program for contemporary Silk Road studies at Sweden’s Uppsala University. Speaking to RFE/RL from Beijing, where he is a guest lecturer at Renmin University, Swanstrom said the quest for natural resources shapes China’s policies in Central Asia, but it is not the whole picture.
China is rapidly emerging as a world power. In a decade or two, it might directly challenge the supremacy of the United States, Japan, and Europe. But before this happens, Beijing’s leaders are trying to create a zone of friendly and stable countries around China’s borders that will give them political support, as well as economic leverage in the future.
This has led Beijing to set up trade missions in every Central Asian country, invest in local enterprises, donate money to aid projects, and give a high profile to new bodies -- such as the Shanghai Cooperation Organization (SCO) -- that group the region’s countries.
"The Chinese do want natural resources," Swanstrom said. "They do want oil and gas because China is in desperate need of these as its economy grows. But it goes deeper than that. They want to secure the borders. They want to make sure that Central Asia is a stable region. Because if Central Asia runs into military conflicts, it is likely to spread over to Xinjiang, China’s westernmost province. And that would be a problem for the Chinese government. So part of this is to create stability in the Central Asia region because stability in Central Asia means stability for China. And also, it’s in the Chinese interest to develop these markets, to create the infrastructure in Central Asia."
On the security front, Beijing has found eager partners in Central Asia’s authoritarian leaders, who share its worries about Islamic militancy, as international affairs expert John Garver, a professor at the Georgia Institute of Technology in the United States, noted.
"I think there is a meeting of the minds between China’s leaders on the one hand and the leaders of the post-Soviet Central Asian states on the other. And cooperation in this area takes the form of intelligence exchanges, police cooperation, training of police, training of military forces, and the design of military operations targeting terrorist activities," Garver said.
Omurbek Tekebaev, leader of Kyrgyzstan’s opposition Atameken (Motherland) Socialist Party, told RFE/RL that it was the United States that involuntarily helped China expand its presence in Central Asia. He traced the rise to the 11 September 2001 terrorist attacks against the United States.
"After 9/11, the United States broke the old stereotype, sending its troops to Central Asia and the Transcaucasus," Tekebaev said. "When the U.S. strengthened its position, China began to also show that it was interested in Central Asia. So, recently, the Chinese leadership told a meeting [of regional leaders] in Tashkent that it will invest about 4,000 million dollars in the Central Asian countries. For example, Chinese leaders spoke openly about their intention to pay the full cost of about $1.5 billion for the construction of a highway from China to Central Asia, via Kyrgyzstan."
Swanstrom of Uppsala University said Russia’s sometimes tenuous grip over the region has paved the way for outsiders, including the Americans, to come in. But the Chinese -- because of their comprehensive regional economic and security interests -- have been the most effective.
"It has to do with the Russian domestic weakness to a certain extent, and that gives the Chinese and many other actors -- among them, of course, the United States and Europe -- an opportunity to move in," Swanstrom said. "But the Americans and Europeans have not taken that opportunity to the same extent that the Chinese have."
Not everyone in Central Asia is happy about China’s interest in the region. There is a latent fear, especially in the countries bordering China, that Beijing is hungry for land. And if that is the case, even a small immigration of Chinese to the region would swamp the local populations.
Although it is vast in territory, for example, Kazakhstan’s population of some 14 million people represents just over 1 percent of China’s 1.4 billion people.
The charge is dismissed out of hand by Beijing officials. But Murat Auezov, a former Kazakh ambassador to China, was less than diplomatic when expressing his concerns.
"I know Chinese culture. We should not believe anything the Chinese politicians say," Auezov said. "As a historian, I’m telling you that 19th-century China, 20th-century China and 21st-century China are three different Chinas. But what unites them is a desire to expand their territories."
Swanstrom was more optimistic. For now, Russia continues to enjoy a decisive cultural and economic advantage in Central Asia. But he argued that breaking this monopoly could serve the Central Asians well.
"It doesn’t necessarily have to be a zero-sum game, but from the Central Asian states, there’s also interest in decreasing the Russian influence and to have Chinese influence -- maybe even Indian influence and American influence and European influence," Swanstrom said. "They have realized over the years that it’s not good to have one dominant power in the region. They don’t want it to be the Chinese or the Russians. They’re trying to diversify the influence over the region, and they are very conscious about the fact that neither the Russians nor the Chinese would be the perfect actor to dominate the region."
If they get that pipeline to the Caspian, or even a rail link, then the Iran China nexus will begin to flourish.
I shall have more comments on Kazakhstan later on.
Once again, great data here!
CHECK THIS OUT:
Nov 19th, 2004, Mexico is ready for expanding ties with Iran on all areas, notably in economy and trade, the deputy of Mexico's foreign ministry for economic affairs, Irma Avriana said on Friday.
Speaking to the grand seminar on Irano-Mexican economic relations, Avriana said Iran was an important power in the Middle East and" we believe expanding ties with Iran will be in the intersts of every country including Mexcio".
Also addressing the audience, the head of Iran's Chamber of Commerce, Alinaghi Khamoushi said Iran enjoyed an economic growth rate of 6.5, adding his chamber tried to strenghten trade bewteen the two countries.
Source:
http://www.iranian.ws/iran_news/publish/article_4531.shtml
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