Fausta's Blog

American and Latin American Politics, Society, and Culture

June 8, 2006 By Fausta

China and oil, and Latin America

In today’s Wall Street Journal (by subscription) Chinese Oil Drill: Beijing’s blundering quest for energy.

Inexperienced in global commodities markets and suspicious of the United States, China’s policy makers are vainly seeking to insulate themselves from the global energy market by locking up energy supplies. To do this, Beijing has supported regimes that promote geopolitical instability, overpaid for energy assets and invested in expensive infrastructure projects as alternatives to transporting oil by sea. China is also developing the capability to project its military power into sea lanes used by oil tankers. It has every right to waste resources in this way, but its clumsy approach harms others by raising international tensions and oil prices.

The article goes on to explain how China’s investments increase geopolitical instability, for instance how

Beijing’s opposition to sanctions [against a nuclear Iran] actually increases the likelyhood of a conflict – a judgement reflected in rising crude oil prices.

The article concludes by stating,

While investing in new iol sources can have positive effects for the world as a whole, that is overweighed by the rist of increased geopolitical instability as a result of China’s blundering quest for energy.

Toasted Bread links to a WaPo article from last year, Big Shift in China’s Oil Policy: With Iraq Deal Dissolved by War, Beijing Looks Elsewhere

With so much competition for assets, China has pursued deals with international pariah states that are off-limits to Western oil companies because of sanctions, security concerns or the threat of bad publicity. China National Petroleum is the largest shareholder in a consortium running much of the oil patch in Sudan, a country accused by the United States of genocide in its western region of Darfur. Last year, China signed a $70 billion oil and gas purchase agreement with Iran, undercutting efforts by the United States and Europe to isolate Teheran and force it to give up plans for nuclear weapons. If Cnooc acquires Unocal, it would have gas fields and a pipeline in Burma, whose operation by the U.S. company has been criticized by human-rights groups.

The WaPo article states that President Hu Jintao said Chinese companies would invest $5 billion in oil projects in Argentina.

Neither article mentions China’s upcoming deal with Cuba for oil drilling in the Caribbean, and the volatile Iran/Cuba/Venezuela mix.

China continues to play an increasingly more visible part in Venezuela, including the upcoming 5th China-Venezuela High Level Convention in July, while at the same time Venezuela tries to bankroll projects such as the creation of a South American natural gas cartel and intervention in Latin American politics (Argentina included).

On the latter, I was told by an expert in Latin America that the plan is IF (big IF) Sandinista Daniel Ortega wins the election Nicaragua, China would build a pipeline from the Caribbean — where Venezuelan oil tankers would dock, to the Pacific — from where the Chinese tankers would take oil to China. The person stating this is not indulging in wild speculation, as China has been playing an increasingly larger role in the Caribbean after Jimmy Carter so kindly let go of the Panama Canal in 1977.

Interestingly, oil might prove to be Hugo’s undoing, whether it drops in price, or if Belize, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama realize their dreams of producing oil for $8 less a barrel than the going world market rate, a dream for which the huge Chinese market is an incentive.

(technorati tags Iran, Venezuela, China, Mexico)

Share

Filed Under: Uncategorized

Tweets by @Fausta
retirees_raise-2015_300x250

Pages

  • About
  • Email

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

Previous Posts

  • Mrs. Maisel goes full Alinsky on Mrs. Schlafly
  • Venezuela: Did the Minister of Defense back out at the last minute?
  • You need to unfriend me
  • Go ahead and Kiss the Girl, if you dare
  • Ashamed

Recent Comments

  • John on Mrs. Maisel goes full Alinsky on Mrs. Schlafly
  • Today’s hot topics: Democrats’ collusion shift, tax-return rift, Venezuela drift, and more! – PoliticalWitchDoctor.com on Venezuela: Did the Minister of Defense back out at the last minute?
  • Today’s hot topics: Democrats’ collusion shift, tax-return rift, Venezuela drift, and more! - AmericanTruthToday on Venezuela: Did the Minister of Defense back out at the last minute?
  • Did Venezuela’s Minister of Defense Back Out At The Last Minute? on Venezuela: Did the Minister of Defense back out at the last minute?
  • Roseanne Not Back, Khan not Invited, Operaman’s back, Jobs back, Fausta’s back (but not here yet) Thoughts under the fedora – Da Tech Guy Blog on Venezuela: Did the Minister of Defense back out at the last minute?

Archives

  • 2019
    • December 2019
    • May 2019
    • January 2019
  • 2018
    • December 2018
    • October 2018
    • July 2018
    • June 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
  • 2017
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
  • 2016
    • December 2016
    • November 2016
    • October 2016
    • September 2016
    • August 2016
    • July 2016
    • June 2016
    • May 2016
    • April 2016
    • March 2016
    • February 2016
    • January 2016
  • 2015
    • December 2015
    • November 2015
    • October 2015
    • September 2015
    • August 2015
    • July 2015
    • June 2015
    • May 2015
    • April 2015
    • March 2015
    • February 2015
    • January 2015
  • 2014
    • December 2014
    • November 2014
    • October 2014
    • September 2014
    • August 2014
    • July 2014
    • June 2014
    • May 2014
    • April 2014
    • March 2014
    • February 2014
    • January 2014
  • 2013
    • December 2013
    • November 2013
    • October 2013
    • September 2013
    • August 2013
    • July 2013
    • June 2013
    • May 2013
    • April 2013
    • March 2013
    • February 2013
    • January 2013
  • 2012
    • December 2012
    • November 2012
    • October 2012
    • September 2012
    • August 2012
    • July 2012
    • June 2012
    • May 2012
    • April 2012
    • March 2012
    • February 2012
    • January 2012
  • 2011
    • December 2011
    • November 2011
    • October 2011
    • September 2011
    • August 2011
    • July 2011
    • June 2011
    • May 2011
    • April 2011
    • March 2011
    • February 2011
    • January 2011
  • 2010
    • December 2010
    • November 2010
    • October 2010
    • September 2010
    • August 2010
    • July 2010
    • June 2010
    • May 2010
    • April 2010
    • March 2010
    • February 2010
    • January 2010
  • 2009
    • December 2009
    • November 2009
    • October 2009
    • September 2009
    • August 2009
    • July 2009
    • June 2009
    • May 2009
    • April 2009
    • March 2009
    • February 2009
    • January 2009
  • 2008
    • December 2008
    • November 2008
    • October 2008
    • September 2008
    • August 2008
    • July 2008
    • June 2008
    • May 2008
    • April 2008
    • March 2008
    • February 2008
    • January 2008
  • 2007
    • December 2007
    • November 2007
    • October 2007
    • September 2007
    • August 2007
    • July 2007
    • June 2007
    • May 2007
    • April 2007
    • March 2007
    • February 2007
    • January 2007
  • 2006
    • December 2006
    • November 2006
    • October 2006
    • September 2006
    • August 2006
    • July 2006
    • June 2006
    • May 2006
    • April 2006
    • March 2006
    • February 2006
    • January 2006
  • 2005
    • December 2005
    • November 2005
    • October 2005
    • September 2005
    • August 2005
    • July 2005
    • June 2005
    • May 2005
    • April 2005
    • March 2005
    • February 2005
    • January 2005
  • 2004
    • December 2004
    • November 2004
    • October 2004
    • September 2004
    • August 2004
    • July 2004
    • June 2004
    • May 2004
    • April 2004
    • March 2004
Content Copyright Fausta's Blog

Site Developed and Managed by 300m.com