News Letter

THE NEW SILK ROAD: CHINA’ ENERGY POLICYAND STRATEGY IN THE MENA REGION

SBE, Vol.20, No.1, 2017

ISSN 1818-1228

Qatar University

Since China lost its self-sufficiency in oil

supply, China’s concern about oil supply and

energy security has become widespread

. In

this context, Muhamad S. Olimat argues that

China’s continuing growth and modernization

is dependent finding and securing oil

supplies

. China has three oil corporations

through which it ensures that national energy

security interests are secure: the China National

Petroleum Corporation (CNPC), the China

Petrochemicals Corporation (Sinopec), and

the China National Offshore Oil Corporation

(CNOOC)

. With the Middle East’s rich oil

reserves, which make up over 60% of the world

market

, China’s energy security and oil

strategy are intrinsically linked to the region.

IV. China’s Equity Ownership

Strategy

To ensure steady oil supply, China has

applied an equity ownership strategy: Chinese

companies have tried to seek equity shares in oil

projects abroad, hoping that this would allow

them to have more control over oil flows and

possibly reduce supply interruption

. In the

Middle East, China’s first upstream investment

and acquisition were made in Iraq. Since then,

Review Commission. 2016, Pg 5-7 available at: https://

www.uscc.gov/sites/default/files/Research/Chinas%20

Response%20to%20Terrorism_CNA061616.pdf

21 Hongtu, Z. (2010). “China’s Energy Interest and

Security in the Middle East.” In

China’s Growing Role in

the Middle East: Implications for the Region and Beyond

Eds. A. Sager and G. Kemp. Washington, DC: The Nixon

Center. (2010)

22 Olimat Muhammad S., China and the Middle East:

From Silk Road to Arab Spring,

Reprint Edition, NewYork,

Rougtledge, 2015. Pp. 68

23 Meidan, M. (2016). “The structure of China’s Oil

Industry: Past Trends and Future Prospects.”

The Oxford

Institute for Energy Studies

, WPM 66: 1-55. (2016)

24 Sun, D. (2011). “Six Decades of Chinese Middle East

Studies: A Review”

Bustan: The Middle East Book Review

2: 22. (2011)

25 Alterman, J. and Garver, J.

The Vital Triangle: China,

the U.S., and the Middle East.

Washington, D.C.: CSIS

Press. (2008)

China has been consistently investing in the

oil sector, including engineering and drilling

in Gulf Cooperation Council (GCC) states,

namely Bahrain, Kuwait, Oman, Qatar, Saudi

Arabia, and the United Arab Emirates. The

China PetroleumEngineering and Construction

Corporation (CPECC) started to get involved in

Kuwait and Iraq in 1983 through subcontracts

whereas the Great Wall Drilling Company

(GWDC) captured drilling opportunities in

Egypt, Qatar, Oman, and other parts of the

Middle East

. Qatar, the largest liquefied

natural gas producer, recently strengthened a

strategic partnership with China, including its

participation in China’s Silk Road Economic

Belt; Kuwait has had strong economic ties

with China since the 1970s (Sager, 2010);

Oman has received $600 million from Chinese

investments in several sectors, including oil,

petrochemicals, upgrading oil transportation’s

efficiency

In North Africa, China has more or less applied

similar strategies. China started its “going

out strategy” to Africa in the late 1990s

In Africa, China has been involved at many

levels through the Chinese Communist Party,

which created multiple institutions specialized

in African matters, involved agents of the

party on the ground, ensured consultation

with both central and local governments

(when seen necessary), and even attempted to

create bounds with some African civil society

groups

. Through official partnerships such

26 Hongtu, 2010; Romano, G. C. and Jean-

François Meglio (2016).

China’s Energy Security: A

Multidimensional Perspective.

Routledge Contemporary

China Series. (2016)

27 Sager, Abdulaziz. 2010. ‘GCC-China Relations:

Looking beyond Oil-risks and Rewards’, in Abdulaziz,

Sager, Geoffrey, Kemp (eds), China’s Growing Role in the

Middle East. Washington, DC: Nixon Center, 2010, Pp.

1–22.

28 Zhao, H. “China’s Oil Venture in Africa.”

East Asia

24.

(2007), Pp.401.

29 Raine, S.

China’s African Challenges

. London:

Routledge.2009, Pp 54