Saudis Tighten China Energy Ties
to Reduce U.S. Dependence
By Henry Meyer
April 20 (Bloomberg) -- Li Wei, a Chinese diplomat in Riyadh, had only just seen off a Ministry of Commerce delegation to Saudi Arabia this month when he started preparing for another Chinese governmental visit in two weeks.
“Every month we have delegations coming to Saudi Arabia,” said Li, who works in the Chinese Embassy’s commercial section in the Saudi capital. “We are too busy.”
China, the world’s second-largest oil consumer, and Saudi Arabia, holder of about a fifth of global crude reserves, are forging ever closer ties as the Persian Gulf kingdom responds to a Chinese drive to feed its rising energy needs. China in November overtook the U.S. as the main buyer of Saudi oil, and Saudi Arabian Oil Co. and Saudi Basic Industries Corp. are investing in refinery and petrochemicals projects in China.
The partnership between Saudi Arabia and China is part of a broader strategy by the world’s largest oil exporter to tap Asian markets and extend global influence. It also helps Saudi Arabia reduce reliance on the U.S., which since World War II has protected Saudi security in return for stable oil supplies, said Ben Simpfendorfer, Hong Kong-based chief China economist at the Royal Bank of Scotland Plc.
“China’s rise has provided Saudi Arabia with an excuse to knock on Washington’s door and to say, you are not our only partner,” he said.
Compared with the U.S., whose support for Israel has created friction with Saudi Arabia, “with China, there is less baggage, there are easier routes to mutual benefit,” said Prince Turki al-Faisal, a former Saudi ambassador to the U.S. and brother of Foreign Minister Saud al-Faisal, in an interview.
Among recent contracts won by Chinese companies in Saudi Arabia was a $1.8 billion award to a Saudi-Chinese consortium including Beijing-based China Railway Construction Corp. in March 2009, for a new high-speed line between the holy cities of Mecca and Medina.
To cater to the influx, Riyadh’s Sheraton hotel last year started to offer a Chinese breakfast of rice porridge, dim sum and steamed buns along with Arab, continental and U.S. dishes.
“We try to satisfy the cultural preferences of our Chinese guests,” said Farid al-Aauuar, director of rooms at the hotel.
establish private oil bank
Tehran Times Economic Desk
TEHRAN – Iranian Oil Minister Seyyed Masoud Mirkazemi said a privately owned bank with a minimum capital of $200 million will soon be opened to fund the oil industry projects.
SHANA news agency quoted the oil
minister as saying on Saturday that the bank would accentuate the role of the
private sector in the industry and provide capital to carry out projects,
especially in downstream industries.
He pointed out that a working group has been set up to expedite the establishment of this bank.
The official added that the new bank will triple the amount of investments in the oil industry within the fifth five-year socio-economic development plan (2010-2015).
Based on the plan, some $200 billion should be invested in the oil industry, of which $125 billion has been earmarked for upstream industries, he said.