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OPEC, Russia seeks to boost China share
(Bloomberg.com)
Updated: 2005-12-21 20:13
OPEC countries, which produce 40 percent of the world's oil, are stepping up efforts to secure their market share in China as the group competes with Russia to supply the world's fastest-growing energy market.
Sheikh Ahmad Fahd al-Sabah, president of the Organization of Petroleum Exporting Countries, will lead the group's first talks with China tomorrow as members including Saudi Arabia and Kuwait plan investments in Chinese refinery projects worth more than $8 billion to increase their share of China's fuel market.
Oil prices have tripled since 2001 as the Chinese economy expanded at more than 9 percent a year, straining global supply. Russia, China's largest non-OPEC supplier, may build a pipeline to feed Siberian oil to China and will raise rail shipments 50 percent next year. Saudi Arabia has used oil refinery investments to ensure sales in Japan and South Korea.
"The relationship between China and OPEC is still weak," said A.F. Alhajji, oil economist and associate professor at Ohio Northern University. "OPEC members should invest more in China and circulate some of the petrodollars that they earned in recent years."
China, the world's second-largest energy market, imported about 800,000 barrels a day from Saudi Arabia, Iran and Indonesia, its largest OPEC suppliers, according to Beijing- based Customs General Administration. Russia, Angola, Oman and Sudan are the biggest non-OPEC exporters to the country. China will need to import more than 3 million barrels a day next year.
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