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China Selling Oil Equipment to Africa


China depends on Africa for roughly one-third of its imported oil. And, many Chinese companies also see Africa as a lucrative market to sell oil drilling equipment. Several Chinese firms are attending this year's oil industry convention, underway in South Africa. For VOA, Terry FitzPatrick reports from Cape Town.

There are roughly 200 vendors at this year's Oil Africa conference and trade show. On the exhibit floor, you can buy everything from oil-proof work boots to off-shore oil rigs. Nestled between the established companies from Texas and the Middle East, are some newcomers.

Tina Zheng: "My company name is Xi'an Fengyang Petroleum Equipments, which is located in the center of China."
Amy Zhang: "Our company name is Hilong Group. We sell the drill pipe."

About a dozen Chinese companies are competing here to sell oil field equipment. Sales representative Pang Ling says her company has found quick success.

" Africa is a good market for us, because we have just entered into this market and we have many rigs now," Pang said.

Sales representative James Yan says China 's share of the African market is small but growing.

"At this moment it's not big enough, but in the future we have the confidence," Yan said.

The surging demand for oil is creating a growing market for drilling and production equipment. And, according to Zhao Zhiming, president of China 's petrochemical industry association, Chinese vendors offer something others cannot.

"China can provide a very good price which is very competitive in all of Africa," Zhao said.

Cost is a key component in developing Africa 's oil resources. Eduardo Lopez of the International Energy Agency told delegates at this conference that competition in the oil business is fueling a spike in equipment prices.

"It has become so difficult to get access to engineers, to platforms to drilling rigs and whatnot. That's a considerable challenge across the industry," Lopez said. "It's really difficult to deal with these ever-rising costs."

But not everyone thinks cheaper Chinese imports are the best solution. South Africa Minister of Minerals and Energy Buyelwa Sonjica would like Africa rely on its own oil equipment industry.

"I would like to encourage all the oil and gas producing countries to endeavor to promote locally owned and controlled companies," Sonjica said. "The second wave of development should now focus on the growth and development of small and medium enterprises that support the oil companies operating on the continent."

Still, the Chinese industry is growing fast. In 2005, it supplied $800 million of oil field equipment to more than 50 countries, worldwide.

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