Pros­per­ing from Oil

Africa ben­e­fits from chi­nese oil and gas gi­ant’s busi­ness prin­ci­ples

ChinAfrica - - OPINION - By Deng Yaqing

deep in the in­te­rior of Cen­tral Africa lies the Re­pub­lic of Chad, a coun­try de­pen­dent on agri­cul­ture for most of its rev­enue. Be­low the sur­face, it has abun­dant re­serves of petroleum, but it was not un­til Chi­nese oil and gas gi­ant - China Na­tional Petroleum Corp. (CNPC) - be­gan pro­duc­tion there in 2011, that the coun­try even­tu­ally re­al­ized en­ergy self-suf­fi­ciency.

When CNPC first set foot in Chad 15 years ago, do­mes­tic oil con­sump­tion in the coun­try was heav­ily de­pen­dent on im­ports. In Septem­ber 2007, a bi­lat­eral agree­ment was reached to build a joint-stock re­fin­ery plant, mark­ing the start­ing point for China-chad petroleum co­op­er­a­tion.

As the Nd­ja­mena re­fin­ery plant went into pro­duc­tion in June 2011, Pres­i­dent Idriss Déby Itno said his coun­try had won the vic­tory of en­ergy in­de­pen­dence, which he at­trib­uted to Chad’s sig­nif­i­cant part­ner­ship with China.

Now, the CNPC op­er­a­tion cov­ers the en­tire petroleum in­dus­trial chain in Chad, rang­ing from ex­plo­ration and de­vel­op­ment, pipeline trans­porta­tion, re­fin­ing and stor­age, project con­struc­tion and tech­nol­ogy ser­vices.

How­ever, such start­ing-from-scratch sto­ries are not con­fined to Chad. CNPC’S co­op­er­a­tion with Su­dan be­gan as early as 1995, where the project has now be­come the largest and most suc­cess­ful CNPC over­seas ven­ture. In Niger, a com­plete petroleum in­dus­trial sys­tem has taken shape un­der a part­ner­ship with CNPC, al­low­ing the coun­try to not only re­al­ize oil self-suf­fi­ciency, but also earn for­eign ex­change through oil ex­ports. Now, the petroleum in­dus­try is the back­bone of the lo­cal econ­omy. Be­sides Chad and Niger, the CNPC West African branch has also seen its op­er­a­tion spread in Al­ge­ria, Mozam­bique and Tu­nisia.

Solid progress

With sup­ports from the Cha­dian part­ner and its stake­hold­ers, CNPC has de­vel­oped two ex­plo­ration and ex­trac­tion projects, two crude oil pipeline projects and the Nd­ja­mena re­fin­ery that can pro­duce gaso­line, diesel, avi­a­tion fuel, fuel oil, liq­ue­fied nat­u­ral gas and polypropy­lene.

By the end of this July, the com­pany had de­vel­oped six oil fields in Chad and trans­ported 13.24 mil­lion tons of crude oil. The an­nual oil pro­duc­tion has reg­is­tered a steady growth in re­cent years and is ex­pected to reach 4 mil­lion tons this year. Com­pany data shows that in the near fu­ture, petroleum ex­plo­ration and de­vel­op­ment ca­pac­ity in Chad will reach 6 mil­lion tons.

Go­ing from risk ex­plo­ration to largescale de­vel­op­ment in Chad, CNPC says it rou­tinely fol­lows the prin­ci­ple of seek­ing qual­ity and ef­fi­ciency while main­tain­ing sus­tain­able de­vel­op­ment.

“CNPC’S oil ex­plo­ration and de­vel­op­ment ac­tiv­i­ties in Africa are guided by the con­cept of mu­tual ben­e­fit and win-win co­op­er­a­tion. The com­pany strictly fol­lows lo­cal poli­cies, laws and reg­u­la­tions, and up­holds a multi­na­tional cor­po­rate cul­ture of mu­tual re­spect, open­ness and com­pat­i­bil­ity,” said Chen Shudong, Gen­eral Man­ager of CNPC In­ter­na­tional, West Africa Ltd. (Chad).

Chad has now seen a steady do­mes­tic sup­ply of oil prod­ucts from the Nd­ja­mena re­fin­ery, and ex­ports part of the out­put to neigh­bor­ing coun­tries, which has laid a solid foun­da­tion for the na­tion’s econ­omy and in­te­grated strength.

In Niger, CNPC’S West Africa branch had paid over $1 bil­lion in taxes to the Niger Govern­ment by the end of 2017. As of this May, the com­pany has pro­duced 5.28 mil­lion tons of crude oil in the coun­try, ac­cord­ing to its sta­tis­tics.

The cnpc op­er­a­tion cov­ers the en­tire petroleum in­dus­trial chain in chad, rang­ing from ex­plo­ration and de­vel­op­ment, pipeline trans­porta­tion, re­fin­ing and stor­age, project con­struc­tion and tech­nol­ogy ser­vices.

Cor­po­rate re­spon­si­bil­i­ties

In Su­dan and South Su­dan, CNPC has been ful­fill­ing its so­cial re­spon­si­bil­i­ties by en­gag­ing in well-planned ac­tiv­i­ties pro­vid­ing pub­lic ben­e­fits. The com­pany has in­vested $120 mil­lion to sup­port the de­vel­op­ment of agri­cul­ture, ed­u­ca­tion, cul­ture, med­i­cal care and in­fra­struc­ture, ben­e­fit­ing more than 2 mil­lion African peo­ple.

By pro­mot­ing the in­te­gra­tion of di­verse cul­tures within the com­pany, em­ploy­ees with dif­fer­ent cul­tural back­grounds can un­der­stand and trust each other and live in har­mony with lo­cal com­mu­ni­ties, said Chen.

In the hin­ter­land of Niger in the Sa­hara Desert, wa­ter short­age is an ob­vi­ous prob­lem. To raise the liv­ing stan­dards of res­i­dents in nearby cities and towns, CNPC has dug 29 wa­ter wells and more than 40 wa­ter sources for lo­cal house­holds and an­i­mal hus­bandry. The same arid con­di­tion is also a chal­lenge in Chad. By the end of this July, a to­tal of 27 wa­ter wells had been drilled by CNPC, ben­e­fit­ing 25,000 res­i­dents in 21 vil­lages.

Apart from wa­ter short­ages, gain­ing ac­cess to ed­u­ca­tion in some African coun­tries is still dif­fi­cult for many chil­dren. The CNPC Niger branch says it has built 38 schools in ar­eas neigh­bor­ing its up­stream projects and oil pipe­lines in the past few years. In Chad, two pri­mary schools have been built and study ma­te­rial spon­sored to three lo­cal schools; a joint ed­u­ca­tion pro­gram with lo­cal univer­sity near the re­fin­ery plant has been main­tained for years, while lo­cal stu­dents and tech­ni­cians have been sent to China to re­ceive fur­ther train­ing and ed­u­ca­tion.

Since CNPC en­tered the Chad mar­ket in 2003, the com­pany has signed with lo­cal en­ter­prises a large num­ber of pur­chas­ing and ser­vice con­tracts, sub­stan­tially boost­ing Cha­dian eco­nomic de­vel­op­ment.

FOCAC con­nec­tion

With the Nd­ja­mena re­fin­ery com­ing into pro­duc­tion, the re­tail price of re­fined oil in Chad was re­duced by about one third, and the coun­try even­tu­ally started to de­velop its own polypropy­lene pro­cess­ing in­dus­try.

Chen said the Fo­rum on China-africa Co­op­er­a­tion (FOCAC) is the most ex­ten­sive, high­est-level and most in­flu­en­tial plat­form for com­mu­ni­ca­tion be­tween China and African coun­tries.

“It will play an in­creas­ingly im­por­tant role in pro­mot­ing mu­tu­ally ben­e­fi­cial co­op­er­a­tion be­tween China and Africa in the field of en­ergy, es­pe­cially oil in the case of CNPC, and in build­ing a com­mu­nity of shared fu­ture,” he said.

CNPC will strengthen co­op­er­a­tion with re­lated coun­tries in Africa in its oil and gas busi­ness through deep co­op­er­a­tion with re­source coun­tries and take an ac­tive role in main­tain­ing the part­ner­ship be­tween China and Africa, said Chen.

Ad­her­ing to the busi­ness prin­ci­ples of be­ing sin­cere, hands on and hon­est, the CNPC says it aims to con­tinue push­ing for­ward its co­op­er­a­tion plans with African coun­tries, as­sist Africa in de­vel­op­ing it­self through China’s de­vel­op­ment, and fa­cil­i­tate re­gional in­dus­tri­al­iza­tion and agri­cul­tural mod­ern­iza­tion, in an ef­fort to achieve win-win re­sults and re­al­ize shared de­vel­op­ment.

* Com­ments to

niyan­shuo@chi­nafrica.cn

Cha­dian Pres­i­dent Idriss Déby Itno (sec­ond right front), at­tends the han­dover cer­e­mony of the first phase of Ronier oil field project

CNPC helps lo­cal peo­ple gain ac­cess to clean wa­ter by drilling wells

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