OPEC, Russia seeks to boost China share
(Bloomberg.com)
Updated: 2005-12-21 20:13

"Securing Access"

OPEC is pumping at the fastest pace for 25 years. Oil traded at $58.10 a barrel in electronic trading on the New York Mercantile Exchange at 1:20 p.m. Beijing time, 27 percent higher than a year ago. Middle Eastern nations will sell roughly $400 billion of oil this year, up from $100 billion in 1999, according to the International Monetary Fund.

Saudi Aramco, the world's largest oil company by production, agreed in 2001 to expand a refinery in Fujian province jointly owned with China Petroleum & Chemical Corp., or Sinopec, and Exxon Mobil Corp. at a cost of $3.5 billion. Aramco may also build a second joint venture plant with Sinopec in the northern city of Qingdao.

"We share the view with most key energy consultants that major capital investment in the sector will be needed to handle expected demand," Aramco's refining head Khalid al-Buainain said on Dec. 1. The company also plans refinery investments in Saudi Arabia, the U.S. and South Korea.

In turn, Sinopec was among companies awarded contracts in 2003 when Saudi Arabia allowed international companies to explore for gas on its territory for the first time in decades.

Kuwait and China have agreed to develop a refinery complex near Guangzhou in the south of the country with the capacity to produce between 200,000 and 400,000 barrels a day of gasoline and other fuels, Sheikh Ahmad, who is also Kuwait's Oil Minister, said in Kuwait City on Dec. 12. That project, which would use Kuwait oil supplies, may cost as much as $5 billion, he said.

"China should allow OPEC members to invest in downstream operations and refineries within China,'' Ohio Northern's Alhajji said. ``China has to make structural changes to attract such investment.