"Doug Kanter" wrote in message
...
"Jack Goff" wrote in message
m...


I've lead *you* by the nose, provided specifics, and you still don't seem
to
get it, moron. Do you *now* understand *where* the increased demand for
petroleum is coming from? Or are you stupid?


We are their biggest market.

China on global hunt to quench its thirst for oil
- Robert Collier, Chronicle Staff Writer
Sunday, June 26, 2005


Move over, Big Oil. There's a new oilman on the world stage -- China.

China's takeover bid for Unocal Corp. makes clear to sticker-shocked
Americans that the 1.3 billion Chinese people are demanding an ever-larger
supply of the world's energy to fuel their booming economy and are willing
to get it wherever necessary.

From Central Asia to Latin America, Africa, the Middle East and even Canada,
Chinese firms are pumping oil and natural gas in many areas that the United
States was counting on to meet its own record-high demand.

"We need to supply our people, and like every country we need to buy oil
from around the world," said Zhou Dadi, director general of the Energy
Research Institute, the central government's main policy agency on the
subject. "This is part of globalization. It is a strategy of sustainable
development. It is part of a historical process."

While China's supply network does not yet rival the global clout of U.S.-
based oil corporations, the shift raises concerns of politicians and
analysts in the United States and Southeast Asia who see China as a future
global giant motivated by the same powerful self-interest as American Big
Oil.

China's thirst for energy has been a major factor driving up the
international price of oil. Light, sweet crude closed at $59.84 a barrel
Friday, the fourth record-high day in a row and a sign that American
motorists will feel increasing pain at the pump in coming months.

Chinese petroleum imports are expected to rise by about 8 percent this
year -- accounting for about one-third the total worldwide consumption
increase, as it has in recent years. Because China's domestic oil production
is in a long-term decline, its imports are expected to surpass the U.S.
import levels within two decades.

U.S. officials have been increasingly uneasy as China has signed major deals
with Iran, Sudan, Burma and Venezuela, all countries that have strained
relations with the United States.

While the Bush administration tries to build international pressure against
Iran over its nuclear aspirations, China has signed a $70 billion long- term
oil and gas supply deal with the Tehran government. China has also signed
agreements to develop heavy oil reserves in Venezuela, where President Hugo
Chavez has emerged as one of Washington's most vocal opponents.



Even in Canada, the top U.S. oil supplier, Chinese firms have signed three
deals this year to tap Alberta's vast oil-sands reserves and to join a
pipeline venture to bring crude to the Pacific coast, where it can be
shipped to China.

In many of these new deals, the webs of alliances and rivalries are
overlapping. CNOOC Ltd., the 70 percent state-owned company that last week
offered $18.5 billion for Unocal, is scheduled to begin imports of liquefied
natural gas next year from Australia, in a project that CNOOC co-owns with
Chevron, its rival suitor for Unocal. CNOOC also is involved with Chevron in
offshore oil production in the Bohai Bay of northeast China.

Western energy analysts in Beijing say that as the government-owned Chinese
oil firms scour the globe for deals, they often have a leg up on the likes
of Chevron and ExxonMobil, which are privately owned.

Because about 80 percent of the world's oil reserves are in the hands of
governments, which usually prefer to deal with other state-owned
enterprises, Chinese firms can gain favor, said Gavin Thompson, China
country manager for Wood Mackenzie, a British energy consulting firm.
Although Chinese companies cannot offer the same high-tech methods for
exploration, drilling and extraction as the U.S. majors, they gain a
negotiating edge by being willing to assume unprofitable side deals that
function basically as development aid.

In 2003 and 2004, for example, the Chinese firm Sinopec signed a series of
deals with Saudi Arabia to develop natural gas fields. Sinopec's investment,
which ultimately could be worth $4 billion, commits the firm to a wide
variety of welfare-state activities, such as building sewage treatment
plants and schools.

Some analysts say this broad brush has served Beijing's foreign policy needs
rather than the companies' bottom line.

"China's acquisition strategy is that it can go anywhere and buy almost
anything," Thompson said. "But as a consequence, its asset portfolio has
become quite random and scattered."

Throughout East Asia, even close allies of Beijing show nervousness about
its energy appetites.

China has been wrangling with Japan over natural gas reserves in the East
China Sea, and with Vietnam over suspected oil deposits near the Spratly
Islands in the South China Sea, setting off worries that such conflicts
could turn violent.

"Throughout all of East Asia, there is a rising new concern about energy
security," said Chin Kin Wah, deputy director of the Institute of Southeast
Asian Studies, a government-backed think tank in Singapore. "From Russia to
China down to Indonesia, there is a new generation of possible conflicts."

Malaysia's Prime Minister Abdullah Ahmad Badawi sounded a warning at a Kuala
Lumpur energy conference June 14: "As governments and companies continue to
pour in more and more money to secure additional oil and gas assets, some of
these assets may also, unfortunately, lead to various geopolitical
maneuverings, disputes and conflicts."

Chinese officials say that no matter how rich and powerful their country
becomes, their need for oil will never turn into U.S.-style gunboat
diplomacy.

"You must realize that China will never be expansionist for the reason of
oil," said Xie Feng, a deputy director-general for China's Ministry of
Foreign Affairs who is in charge of North American relations. "It will never
act like a superpower.

"It might become a regional power. In all its history over the past
thousands of years, China has never sent troops abroad, to have colonies, to
seize resources. This is not part of the Chinese character. You must
understand our culture. We are not like that."