Newswire: China & Commodities in focus

China stops expansion projects in steel industry for three years - Xinhua

China's Ministry of Industry and Information Technology (MIIT) Thursday announced a three-year moratorium on approvals of new expansion-related proposals in the iron and steel industry, as the government pledges to eliminate outdated capacity.


CISA stance hurts small steel mills - China Daily

China's top negotiators in the bitter and protracted row over the price of iron ore seem destined never to agree - risking a loss of face that will raise questions about whether they are up to the job and who it is they are actually representing.

Their apparent refusal to compromise is damaging the competitiveness of smaller domestic steel mills, forcing them to buy from their larger counterparts, say analysts. The bigger firms have been content to pay whatever the spot price is for ore and pass on the premiums.


CNPC to speed up oil assets buy plan - Xiao Wan of eChinaCities

China National Petroleum Corp (CNPC), the country's largest oil and gas producer, will speed up overseas acquisitions in regions such as Africa and South America this year, in a bid to boost China's quest for energy security.


Coal mines to merge in new plan - China Daily

A large-scale restructuring of the coal industry in China's major coal-producing province of Shanxi, starting at the end of this month, will reduce accidents and improve efficiency by shutting down small coal mines, officials said.

"The restructuring this time is the largest after years of adjusting the coal industry's structure," Miao Huanli, planning section director of Shanxi provincial coal bureau, said yesterday.

China to buy Repsol Assets in Argentina - Update

[China - Argentina - Spain]

China's CNPC said offering $14.5 billion for Repsol investment - Market Watch

SAN FRANCISCO (MarketWatch) -- China National Petroleum Corp. has offered up to $14.5 billion for a majority stake in the Argentine unit of Spanish oil company Repsol YPF SA, according to media reports published on Tuesday.

The South China Morning Post, citing unnamed sources, reported that CNPC has offered between $13.2 billion and $14.5 billion for a 75% stake in the unit.

Dow Jones Newswires reported that Repsol said last week that it had received proposals from a number of companies for a stake in the unit.

China has been acquiring energy assets as its growing economy demands more resources to support its needs.

Sinopec has also secured a deal with Brazilian firm Petrobras (PEFGF) to supply it with 150,000 barrels of crude a day this year, and 200,000 barrels per day for nine years starting in 2010, according to the state-run China Daily.

Newswire: South-South Cooperation

[China - Venezuela] -- CNPC, Venezuela Plan to Build Two Oil Refineries in China
China National Petroleum Corp. and Venezuela plan to build two oil refineries in China, Jiang Jiemin, the president of the Chinese company, told reporters in Beijing today.


[China - Trinadad & Tobago] -- Alutrint: Chinese labor needed due to lack of local expertise
China's EXIM bank placed as a condition on its consent to provide a US$400mn loan to the Trinidad & Tobago government to build the Alutrint aluminum smelter - in the La Brea region of Trinidad island - that the project hire Chinese contractor CMEC to provide labor and technology for the plant, Alutrint manager of communications and community relations Josieann Richards told BNamericas.


[China - Russia] -- Chinese Envoy to Russia: Oil Pipeline Serves Strategic Goals of Both Sides
The construction of the China-Russia oil pipeline conforms with the strategic goals of China and Russia to diversify the former's energy imports and latter's energy exports, Chinese Ambassador to Russia Liu Guchang has said.


[South Korea - Peru] -- Peru hopes to complete 70% of FTA talks with Korea this week
Peru hopes to complete 70 percent of free trade negotiations with South Korea this week because of the similarities found between the two negotiating teams, allowing them to progress quickly, Peruvian chief negotiator Nathan Nadramija said Monday.

During the first round of FTA Negotiations in Seoul on March 16, both countries successfully concluded four chapters relating to electronic commerce, border services, as well as two other chapters related to institutional issues.


[India - Argentina - Bolivia] -- Jindal Begins Producing Gas in Bolivia for Export to Argentina
India’s Jindal Steel & Power has started producing natural gas in Bolivia that will be exported to Argentina, a company executive told Efe on Monday.

Luis Carlos Kinn, manager of Jindal subsidiary Gas to Liquids Internacional S.A., confirmed the successful completion of the first production test at the well drilled in the El Palmar field, some 50 kilometers (31 miles) from Santa Cruz, the capital of the likenamed eastern province.


[Chile - Bolivia] -- Chile Open to Tunnel Proposal Giving Bolivia Access to Sea
The Chilean government is willing to study the proposal by a group of architects that would provide landlocked Bolivia with access to the sea through a tunnel to an artificial island in the Pacific Ocean.


[Venezuela - Angola] -- Venezuelan Government Bank BANDES To Open Branch in Angola
Jesus Alberto Garcia, Venezuelan ambassador to Angola, stated in an interview with Radio Nacional de Angola that Banco de Desarrollo Económico y Social de Venezuela (BANDES), the state development bank of Venezuela, will open a branch in Angola. He added, “This is one of the main things President Chavez wants to do with Africa.” Branches of BANDES outside of Latin America and the Caribbean include Syria and the Republic of Mali.


[Latin America - Spain] -- Spain Wants Closer Ties with Latin America
Spain’s King Juan Carlos and Prime Minister Jose Luis Rodriguez Zapatero said Monday that the upcoming bicentennials of Latin American independence should be used to promote Spanish and European Union ties to the region.

Chinese state oil firms preparing bid for Petro-Tech Peruana's offshore oil assets

AFX Financial News -- August 13, 2008

"Chinese state oil firms are readying bids for Petro-Tech Peruana, a privately held oil company with offshore assets in Peru which could fetch $1.5-2.5 billion, sources with knowledge of the situation said.

Several sources said Petro-Tech, which is owned by the private U.S. firm Offshore International Group, was up for sale and several Chinese companies were looking at it, with oil giant CNPC and offshore specialist CNOOC Ltd. potential bidders.

CNPC is the parent of PetroChina"

Venezuela's PDVSA and China's CNPC to cooperate in the production of 8 new oil rigs -- annually

I am intrigued, as usual, by the fact I am only able to find a few sources in English which have covered the recent development in Sino-Venezuelan cooperation. I suppose this is one of the main reasons I started this site-- to share developments in the works between China and South America, which go largely unnoticed in the West.

As described in a recent article published by BNAmericas, Venezuela's state oil company PDVSA (Petroleos de Venezuela S.A) and China's state oil company CNPC (China National Petroleum), have entered into a joint venture in which the two government owned oil conglomerates will work together in order to produce 8 new oil rigs by years end in Venezuela.

This adds to the two oil rigs delivered by CNPC in November 2007, and three more to come in 2009, bringing the total number of "made in China" oil rigs operating in Venezuela to 13. This will also allow Venezuela's PDVSA, for the first time in the country's history to construct their own oil rigs domestically... without North American or European assistance.

Don't get too excited... This it is not major sign of political or economic unity between the two nations. At least, not on the level Venezuelan state media is reporting it to be. Want proof?

Chinese media has virtually ignored this development, as they usually do with most things concerning Venezuela. China does not want to attract the attention of the US or Europe by dealing too closely with Chavez.

The most recent article published by China's state media, Xinhua, I can find on this subject (in either Chinese or English), is dated May 13, 2008.

Granted my reading ability in Chinese is far from perfect, however searching the words "petrol," and "Venezuela" can usually lead me in the right direction and allow me to find a story pertaining to the topic I am searching for. From what I am able to comprehend in this Chinese article from May, I personally do not feel it is directly related to the deal discussed on June 23, 2008 on BNAmerica's website.

Chavez would like to consider China a strategic ally, both on a political and economic level. As the world's second largest consumer of energy, the match seems to fit... Too bad for Chavez its quite costly to ship Venezuela's heavy, dirty crude oil all the way to China.

Second, Chavez has unrealistically already raised China's economic position and importance for his country right next to the spot the US still occupies. This is hardly feasible to imagine considering Venezuela and China's geographic locations.

Third, Venezuela's trade with China is inconsequential compared with Venezuela's trade with the US.

Fourth, when you compare China's trade with other Latin American nations, Venezuela's trade is insignificant when compared with China's current trade with other nations such as Brazil, Chile or Argentina.

Last, and perhaps Hugo's biggest mistake, is thinking China would be willing to extend it self to a country which is not only in the "back yard" of the US, but also a country which currently is not on good terms with US. Chinese culture, tradition and history have shown the Chinese have a tendency to avoid potential problems that could threaten "peace" or "stability," and a more significant relationship with with Venezuela would therefore be risky.

China has no interest in antagonizing the US, which remains China's major trading partner in the global economy. For now, China's outbound investments will be focused in projects such as the one discussed above. PDVSA will retain a 85% stake in the project, leaving 15% to CNPC. Total investment is projected to be roughly $430 million usd.

Quite small, when you consider for China's new sovereign wealth fund has about $300 billion usd sitting in reserve, waiting to be invested.

**Useful hint for readers **

It is easy to translate English words into Chinese characters without a pinyin input system using this great Chinese-English online dictionary / translator (dict.cn). After you find the characters for the key words you're looking for use "ctrl + f" or "apple key + f (for mac os)," to search for them in a article. Petrol = 汽油 (qi you) , Venezuela = 委内瑞拉 (wei nei rui la).