Transcript
JANET LIAO
Because China used to be a planned economy, so you don't have really independent companies. All the companies are the same, I mean as government departments. So initially, there was a petroleum ministry. And the petroleum ministry- it was CNPC, actually- so that the oil fields, all of the fields in China were under that ministry. So the ministry was the company and the ministry. And then petrochemical ministry had this Sinopec later on. So Sinopec, actually all the refineries were under this petrochemical ministry for a long time until the 1980s. So since then we have got quite a number of government reforms, which was aimed to separate the government and the oil companies. But then that was done for nearly 20 years that this was achieved, the goal was achieved. So you do have the independent companies and the government function was removed completely. China National Petroleum Corporation used to be an upstream oil company in China. And then China Petrochemical Company, which is called Sinopec, was a downstream company. And those were the two largest oil companies in China. But in the late 1990s, they were restructured to be upstream and downstream integrated companies. The purpose of this was to break the monopoly of those two companies in the different sectors. But in the end, it didn't really work as planned, because the result was like CNPC, which was the upstream company, then dominated the northern China market and then Sinopec dominated the southern China. So those are the two biggest companies. Now you have the third company, which is offshore. It's China offshore oil company called CNOOC. Then they are the latest. This is the latest established company, but then it's more international in its management and strategic thinking. So it is more influential internationally I think CNOOC, but they were all at the turn of the century. They were all listed at the international markets, the stock markets.
GILES MOHAN
China's national oil companies or NOCs have been engaging with Africa for quite a while now. They first really entered into Sudan first of all and then now have found certain countries, obviously oil producing countries, where they've done some kinds of deals. I think the main way they've engaged actually has been through what's called oil for infrastructure deals. So the idea is that the Chinese need access to the oil or it could be other natural resources. And they also have bank accounts, because of their trade with the rest of the world is full of what's called foreign exchange. So the Chinese have a lot of money that they need to apply and make work for them. So what we saw over the last 10 or 15 years is a lot of big investment loans going into African countries in exchange for the use of Chinese companies to deliver the infrastructure. So it might be that one of the banks lends the money to Ghana, Ghana then uses that money, because of the clause in the contract, to hire in a Chinese company to build a dam. We saw this in Ghana. We see this elsewhere. So these are called oil for infrastructure deals. And they were first applied in Angola. So often people talk about the Angola mode of oil for infrastructures. That's one of the dominant ways in which Chinese oil companies have engaged with Africa. But we're increasingly seeing that kind of diversifying. So one of the other ways now that Chinese companies are coming into African oil markets is through buying out other companies. So you may have, in the case of Nigeria, a Canadian company that was then bought by a Chinese company. So in effect then the Chinese have some control over that oil production block. So there's different ways that they engage. It's not just a one size fits all. And we've seen that changing over the last 10 years.