Equatorial Guinea, the third-largest crude-oil producer in Sub-Saharan
Africa, is seeking to deepen ties with Chinese energy companies as the
country works to improve power infrastructure and increase output of
crude and natural gas.
Equatorial Guinea has approached China Petrochemical Corp.,
known as Sinopec Group, about building a 20,000-barrel-a day refining
and petrochemical complex in the country, which later could be expanded
to 60,000 barrels a day, Gabriel M. Obiang Lima, the country's minister
of mines, industry and energy, told Dow Jones Newswires.
"We are planning to build a refinery, but will only use a
small amount (of crude) coming from our own production," he said. "We
are having discussions with Sinopec regarding that...we were expecting
to sign something today, but the time has gone too fast."
Although Equatorial Guinea has approached other engineering
companies based in the U.S., Spain, Italy and Germany about developing
the refinery, state-owned Sinopec would be the only company that would
take an ownership stake in the project if chosen, Mr. Obiang said,
adding that a final decision could be made by year-end. Sinopec couldn't
immediately be reached for comment after work hours.
The West African country has approached Sinohydro Group Ltd.
(601669.SH), which built most of China's Three Gorges Dam, about
building more hydroelectric power plants with an eye toward selling
electricity to neighboring countries such as Nigeria, Cameroon and
Gabon, Mr. Obiang said. Sinohydro's first 125-megawatt hydropower
project in Equatorial Guinea is expected to come online in October, he
added.
Cnooc Ltd. (CEO), China's largest offshore oil producer, plans
to drill two deepwater wells off the coast of the country next year,
Mr. Obiang said. Cnooc has drilled one well already, but discovered
non-commercial amounts of crude, he said. Next year's wells will be
drilled in partnership with South Korea's SK Innovation Co. (096770.SE),
which will provide deepwater drilling technology, he said.
Cnooc signed an agreement with Equatorial Guinea in 2006 to
explore a 2,287 square kilometer block off the coast of the country,
with a water depth ranging from 30 to 1,500 meters. "We are inviting
(Cnooc) to negotiate in another block, but they haven't concluded
discussions with us," Mr. Obiang said.
Additionally, Equatorial Guinea plans to sign a total of six
production-sharing contracts for onshore and offshore oil blocks this
year with companies such as
Noble
Energy Inc. (NBL), Dana Petroleum PLC and Murphy Oil Corp. (MUR), Mr.
Obiang said.
Meanwhile, the West African country on Friday signed a series
of preliminary agreements with Chinese energy companies on the sidelines
of the fifth Forum on China-Africa Cooperation in Beijing. The
agreements included a memorandum of understanding with Hong Kong-based
Elegance Power to explore and develop onshore oil-and-gas blocks,
electricity projects with China Machinery Engineering Corp. and a
crude-supply deal with Sinochem Corp. in exchange for trade credit to
pay for infrastructure projects.
Unlike the U.S. and other countries, China hasn't attached
political or environmental strings to much of its aid.
"Equatorial Guinea remains mired in corruption, poverty, and
repression under President Teodoro Obiang Nguema Mbasogo, who has been
in power since 1979," the non-government organization Human Rights Watch
said in its 2012 report. "Vast oil revenues fund lavish lifestyles for
the small elite surrounding the president, while most of the population
lives in poverty," it said.