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Saudi King Signs Energy Deal With China


China has signed an agreement with Saudi Arabia that may boost Beijing's purchases of Saudi oil. The deal came during a visit by Saudi King Abdullah to the Chinese capital.

King Abdullah's three-day visit is the first to China by a Saudi ruler since the two countries established diplomatic relations in 1990.

At the top of the agenda is, of course, oil. Saudi Arabia is one of the world's leading oil producers, and China, with its booming economy, has become one of the major purchasers.

The Saudi leader met with Chinese President Hu Jintao before signing a memorandum of understanding, which broadly outlines the two countries intentions to increase cooperation on energy. China, the world's number-two petroleum consumer, is eager to diversify its sources as its energy demands continue to soar.

James Brock, an independent consultant in Beijing who advises China's energy sector, says Saudi Arabia is an attractive resource, because it is more dependable than some of the other places where China has been looking for oil.

"They [Saudis] are not as volatile places as Nigeria or Russia, where the supply has been highly variable," said Brock. "They are not as subject, or at least so far they have not been subject, to political upheaval like Iran and Iraq. So, they are a good, dependable supplier, and China would like to have as many of those as they can."

Saudi Arabia already accounts for about 17 percent of China's oil imports.

Officials gave few details on the five agreements, saying only that they had to do with cooperation on oil, gas, and minerals; expanding trade, and avoiding dual taxation. There was also an agreement on a Saudi loan to fund a development project in China's largely Muslim region of Xinjiang.

The Saudi King's visit to Beijing follows a visit by Chinese Foreign Minister Li Zhaoxing last week to several West African nations, including oil-rich Nigeria. China announced this month it is bidding for a major stake in a Nigerian oil field.