King to sign Saudi-China oil deals
Saudi Arabia’s King Abdullah is expected to sign a series of agreements on energy cooperation and trade during meetings in Beijing as he continues his state visit to China.
The three-day visit that began on Sunday is the first by a Saudi ruler since the two countries formed diplomatic relations in 1990, and comes as China tries to secure overseas oil and gas reserves for its power-hungry economy.
Total trade between the two countries – much of it Saudi oil bought by China – grew by 59% in the first 11 months of 2005 to $14 billion, according to China‘s Foreign Ministry.
Saudi Arabia accounts for about 17% of China‘s imported oil.
China, the world’s second biggest oil consumer, has been aggressively seeking to strengthen relationships with major oil suppliers as it grows increasingly reliant on oil imports.
An agreement to be signed during Abdullah’s visit calls for increased cooperation and joint investment in oil, natural gas and mineral deposits, the Dow Jones financial newswire reported.
The report did not specify any financial details and the Saudi Embassy in Beijing said it had no information on the King’s visit.
Access to oil
China has been seeking to expand sources of crude oil to fuel its booming economy, hoping to tempt potential partners with offers of diplomatic support and aid packages.
Abdullah’s visit follows Beijing’s first formal talks with the Organisation of Petroleum Exporting Countries (Opec) in late December.
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China needs to expand its oil |
China and Saudi Arabia have significantly expanded commercial ties in recent years after establishing diplomatic relations in 1990.
The main Saudi government oil company, a Chinese producer and Exxon Mobil Corp are partners in a $3.5 billion project to expand a refinery in southern China.
Some observers believe that the Chinese need for new oil supplies could lead to a stand-off with the United States over access to Middle Eastern oil.
After his talks in Beijing, Abdullah will move on to India, which like China is seeking to secure access to oil supplies to fuel its own economic expansion.