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June 10, 2019updated 11 Jun 2019 9:44am

China-Africa co-operation promotes developments in Africa’s upstream sector

Africa accounts for more than 25% of the total oil and gas imported to China, making it the second largest region supplying China after the Middle East.

By GlobalData

China has become the world’s top importer of both crude oil and natural gas since 2018, importing two-thirds of the energy it consumes. Africa accounts for more than 25% of the total oil and gas imported to China, making it the second largest region supplying China after the Middle East.

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Chinese investment in Africa

During 2018, among the top 15 countries that supplied crude oil to China, three African nations – Angola, Congo Republic and Libya, provided more than 15% of China’s overall imported crude.

From 2019 to 2023, Chinese national oil companies’ (NOCs’) – China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (SINOPEC) and China National Offshore Oil Corporation (CNOOC) – development and production capital expenditure (Capex) in Africa’s upstream sector is forecast at just over US$15 billion, with all three companies are almost equally sharing the amount.

The combined investment from the three companies is the fourth highest in the time period, behind BP Plc, Royal Dutch Shell Plc and Eni SpA.

Chinese NOCs’ estimated international upstream Capex by region (2019-2023)

 

Source: GlobalData Oil and Gas

Increased production volumes from Africa for the Chinese NOCs are expected due to the ramp-up of the Egina field in Nigeria. Egina commenced production at the end of 2018 and is expected to reach peak production of approximately 200,000 barrels of crude oil per day (bd) in 2019 making CNOOC’s production as double.

CNOOC is the third largest NOC by both domestic and global productions but has gained vital experience as the dominant operator in China’s offshore sector. It spent US$2.3 billion in 2006 to acquire 45% stake in Nigeria’s OML 130 deepwater license, which is located in one the world’s most prolific oil and gas basins and contains the Akpo and Egina fields.

China has advanced its relations with Africa through field development projects in the energy sector and the cooperation has rapidly deepened and expanded. Chinese NOCs are investing in Africa to secure oil supplies to help feed growing demand back home in the short term, and in the long term, they want to position themselves as global players in the international oil market.

In the meantime, Chinese companies also offer financial sources to Africa’s development and raise the value of the continent’s energy resources.

 

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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
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