China’s Energy Diplomacy In Africa(a Case Study Of Nigeria)

China’s growth and its capacity to move in thirty years from under-development to an emerging global power and second largest energy consumer in the world has attracted the attention of the world. Because of China level of industrialization and modernization energy consumption raised at alarming rate particularly in the twenty one century which surpassed Japan. Therefore, to meet its demand and continue pursuing its dream in order to catch with developed countries like Europe and United States, it become imperative for Chinese leaders to imbibe a new policy and strategy in order to reach its aspiration. Hence, China energy diplomacy strategies were postulated. In search of energy China went to Middle East, South America, and Africa. China always identifies itself with developing countries because of its experiences of subjugation, exploitation and imperialism from the western countries; African being is an old friend of China and the largest continent with largest number of developing countries China pursuing unique energy diplomacy base on win-win scenario. While trade partners like China leave no doubt that they can surpass traditional trade partners from the developed world in Africa, it is certainly still an open question whether this latest incarnation of South-South cooperation will be less exploitative and more relevant to development needs. China has served as a development model for Africa and an alternative source of trade and finance from Africa’s traditional development partners.(Western) The impact of China on African economies has been diverse, depending in part on the sectoral composition of each country’s production.(South-south corporations) Overall, China’s increased engagement with Africa generates important gains for African economies.So, one best way to accomplish national interest is through diplomacy. Diplomacy like politics is the art of the possible, that is, the ability to construct arguments and implement practical measures in a way that yields maximum payoff. But the payoff in this case can only be expressed in the realization of interests, be they tactical or strategic, short-term or long-term, local or systemic. In other words, diplomacy is motivated by interests, while economic diplomacy, correspondingly, by economic interests. However, China’s energy diplomacy strategy towards African nations has become more active in recent years. China is concerned about depending on too few energy sources; Africa is a good place for China to expand its sources because it is rich in natural gas and oil, and Chinese companies are sometimes better equipped to deal with the political risks that exist in some African countries than Western multinationals. Africa and China have been trading partners for decades. But in recent years, the level and intensity of their relationship have increased dramatically. China’s relationship with Africa has been described as part of the new "south-south co-operation" through which developing countries help each other rather than depend on wealthy northern states, in April2011, beijing published a white paper on foreign aid, outlining for the first time its development assistance policy, responding to the general belief that its aid programme is little more than a ploy to gain further access to Africa’s natural resources, the white paper laid out an aid policy founded on solidarity among developing countries. Energy diplomacy has been widely seen as a hallmark of Hu’s Jintao’s foreign policy. For example, diplomatic visit by Hu Jintao within a few days at the beginning of2006are arguably all closely related to its interests in overseas energy resources. Moreover, on recent Xi Jinping visit to Tanzania and Congo both are new oil discovery country which justify the assertion of China desperate thirsty for African energyNigeria is well endowed with energy resources. The main energy resources are crude oil, natural gas, coal, tar sand, biomass and other renewable energy resources such as solar energy, tidal and wind power, as well as large hydroelectric potential. Proven crude oil reserves stand at about40billion barrels, and this is expected to reach about55million barrels in the very near future. The Nigerian market offers significant opportunities for foreign firms with a keen interest in expanding their operations internationally, and the oil and gas industry remains one of Nigeria’s most lucrative and viable investment opportunities. China is a country which rich with natural resources included energy and it past so many transformation in its energy sector. But since1993when China energy consumption exceeded its domestic sources its leaders strategized their effort in order-cope with challenges. One the recent effort was in1998; the Chinese government reorganized most state owned oil and gas assets into two vertically integrated firms:the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec)’. Another important state sector firm is the China National Offshore Oil Corporation (CNOOC),"which handles offshore exploration and production and accounts for roughly15%of China’s domestic crude oil production". each oil company is responsible for production in different regions. CNOOC is the company responsible for offshore production."CNPC has acquired exploration and production interest in21countries spanning four continents. It is apparent that China’s oil diplomacy in Africa achieves a remarkable success in the continent. Consequently, some scholars begin to purely link China’s African policy with oil or energy, whereas others argue that China goes to Africa for grabbing raw materials to gear its impressive economic growth. Although the two theories could not portray the full picture of China’s African policy, the latter argument seems more pragmatic, because87percent of China import from Nigeria is energy.Until recently, China had been completely excluded from Nigeria’s oil industry by an established presence of Western oil companies in Nigeria. This is rapidly changing, however, through a mix of canny Chinese diplomacy and sweetener development deals, exports to China constituted only1.6%of Nigeria’s total oil exports in2010, far behind the United States (58.7%), brazil (11%) and other traditional trade partners. Consequently, Petro China signed an agreement with the Nigerian government to locate upstream oil and gas assets that might be incorporated into downstream projects. In July2005, Petro China signed an$800million contract that guaranteed30,000barrels per day to China over a five-year period, to be renewed every year (Xinhua, July9,2005). Building on such developments, in April2006, the Nigerian government offered China four oil exploration licenses in exchange for$4billion worth of investment in Nigeria’s infrastructure, on May2010, only days after President Jonathan was sworn in, China signed an impressive$28.5billion deal with his government to build three new refineries, something that in no way fits into the plans of either the IMF, or of Washington, or of the Anglo-American oil majors. China State Construction Engineering Corporation Limited (CSCEC) signed the deal to build three oil refineries with Nigerian National Petroleum Corporation (NNPC), in the biggest deal China has made with Africa. Around87%of Nigeria’s exports to China are oil and gas products.However, this diplomatic relations between China and Africa in general and Nigeria in particular must yield positive and nagetive impact from both side. Therefore, among all multinational corporations, the ones that have adversely affected the environment are those related to the oil industry. Apart from the quality of the environment that has been adversely affected, it has also imposed considerable social and economic cost on livelihood and therefore has become serious threat to sustainable development. While in another way round Multinational Corporations (MNCs). In a bid to forestall the conflictual relationship that exist between host communities and the oil companies, the oil multinationals embark on various projects aimed to ameliorate the sufferings of the people who have been adversely affected by their activities and also to create an enabling environment for the continuation of business. China-Nigeria energy relations are worthly noting particularly in related with oil exploitation. Therefore, to have a smooth running of this deal there is need to ensure implementation of laws and regulations in Nigeria and to ensure compliance by the Chinese investors. Such laws include labour law, social responsibility law and local content requirement.