Energy Journal: China Broadens Reach Into Latin America

June 6, 2013 by  
Filed under Wind Energy Tips

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Having successfully made vast inroads into Africa, North America and the key oil-producing region of the North Sea, resource-hungry China is turning its attention to Central and South America.

Venezuela is negotiating a $4 billion credit line from the Export-Import Bank of China that would be used for purchasing oil-field equipment, The Wall Street Journal’s Kejal Vyas reports from Caracas. The deal adds to a separate $4 billion loan that state oil company PdVSA will receive from the Chinese government to boost oil production at Petrolera Sinovensa, a joint venture in Venezuela’s vast Orinoco heavy-oil belt.

The Chinese Ex-Im Bank is also extending a credit line of $1 billion to Petroleos Mexicanos, Rigzone reports, again to buy vessels and offshore equipment.

The Mexican and Venezuelan oil sectors have been hampered by underinvestment and restrictions on outside money.

What’s in it for China? As ever, access to the fuel for its economy—Venezuela currently sends more than 600,000 barrels of oil a day to China and aims to reach 1 million barrels a day within a couple of years, the Journal says. Pemex will begin increasing oil exports to China by an initial 30,000 barrels a day, Reuters reports.


The Journal has a must-read story today—Summer Said and Benoit Faucon report on how cash-strapped Egypt is struggling to complete oil-supply deals agreed on with Iraq and Libya, seen as vital for easing its fuel shortages, because it has been unable to provide acceptable bank guarantees.

The story shines a light on Egypt’s post-revolution struggles—the new government is short of funds and being refused credit isn’t going to endear the country to others. Egypt is the world’s largest importer of wheat, and rising food costs were a direct cause of the uprisings that toppled former president Hosni Mubarak in 2011, as well as the leaders of Tunisia and Libya.

Predictions of strong wheat and corn production in 2013-14 could provide succor for the beleaguered Egyptian administration—provided the world’s big trading houses have confidence that they will get paid.

But a lack of fuel could lead to farmers being unable to irrigate their fields, which, in turn, would result in food shortages, says.

Two years on from the protests that turned Tahir Square into a focal point for Egyptian grievances, there is a feeling that the country’s modern revolutionary period may not yet be over.


The U.K.’s confused, disjointed approach to greening its energy supply has taken another odd step.

The government is changing the planning laws to allow local communities more say in where onshore wind farms are situated—even going so far as to, rather patronizingly, help local people to gain the skills they need to enable them to engage more confidently with developers.

The need for renewable energy doesn’t automatically override environmental protections, the government says.

England’s green and pleasant land won’t be blighted by turbines, unless the locals would rather the increased incentives on offer to permit a windmill near an Englishman’s castle.

The government is all about the community. Ed Davey, the man charged with seeing through the energy policy, says he wants a community-led revolution and will prove it by dropping into a solar project in South London.

There are plenty of other locally led energy projects springing up across the U.K., both on the supply side and the demand side. Will they be enough to cover projected imminent shortfalls in power output?


Crude-oil futures ticked higher in London morning trading Thursday, but remain constrained within the narrow range seen since the start of May. With a lack of fundamental factors to influence prices, traders are waiting for a key U.S. labor market reading on Friday for an indication of the health of the world’s top economy. You can read the Journal’s market report here.

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