China drills deeper into Latin America

June 3, 2010 06:54

Venezuela, Argentina and Brazil all have deals with China to supply oil in exchange for loans. While it remains unknown at what cost to US interests China’s strategic partnerships with Latin America will have in the long-term, it behooves Washington to engage Latin America and maintain friendships throughout the region as the power gravity slowly shifts east.

By Russell Hsiao at Asia Times Online

Norwegian oil company Statoil announced on May 21 that it agreed to sell to Chinese state-owned Sinochem Group a 40% stake (US$3 billion) of the Peregrino field located in the Campos basin offshore of Brazil. The Peregrino announcement closely follows the disclosure in March that another major Chinese state-owned oil company, China National Offshore Oil Company (CNOOC), was acquiring 50% ($3.1 billion) of a joint venture with Argentina’s Bridas Energy Holdings Ltd.

While the two transactions are still subject to their respective governments’ approval, these agreements highlight the renewed focus of Chinese activities on Latin America, markedly raising China’s stakes and profile in the region. The apparent surge of Chinese interests in the region demonstrated by the raft of recent deals also laid bare Beijing’s geopolitical strategy to assure a diversified energy supply and evolving strategic partnership with Latin America.


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