Equatorial Guinea, the third-largest crude-oil producer in Sub-Saharan Africa, is seeking to deepen ties with Chinese energy companies as the country works to improve power infrastructure and increase output of crude and natural gas.
Equatorial Guinea has approached China Petrochemical Corp., known as Sinopec Group, about building a 20,000-barrel-a day refining and petrochemical complex in the country, which later could be expanded to 60,000 barrels a day, Gabriel M. Obiang Lima, the country's minister of mines, industry and energy, told Dow Jones Newswires.
"We are planning to build a refinery, but will only use a small amount (of crude) coming from our own production," he said. "We are having discussions with Sinopec regarding that...we were expecting to sign something today, but the time has gone too fast."
Although Equatorial Guinea has approached other engineering companies based in the U.S., Spain, Italy and Germany about developing the refinery, state-owned Sinopec would be the only company that would take an ownership stake in the project if chosen, Mr. Obiang said, adding that a final decision could be made by year-end. Sinopec couldn't immediately be reached for comment after work hours.
The West African country has approached Sinohydro Group Ltd. (601669.SH), which built most of China's Three Gorges Dam, about building more hydroelectric power plants with an eye toward selling electricity to neighboring countries such as Nigeria, Cameroon and Gabon, Mr. Obiang said. Sinohydro's first 125-megawatt hydropower project in Equatorial Guinea is expected to come online in October, he added.
Cnooc Ltd. (CEO), China's largest offshore oil producer, plans to drill two deepwater wells off the coast of the country next year, Mr. Obiang said. Cnooc has drilled one well already, but discovered non-commercial amounts of crude, he said. Next year's wells will be drilled in partnership with South Korea's SK Innovation Co. (096770.SE), which will provide deepwater drilling technology, he said.
Cnooc signed an agreement with Equatorial Guinea in 2006 to explore a 2,287 square kilometer block off the coast of the country, with a water depth ranging from 30 to 1,500 meters. "We are inviting (Cnooc) to negotiate in another block, but they haven't concluded discussions with us," Mr. Obiang said.
Additionally, Equatorial Guinea plans to sign a total of six production-sharing contracts for onshore and offshore oil blocks this year with companies such as Noble Energy Inc. (NBL), Dana Petroleum PLC and Murphy Oil Corp. (MUR), Mr. Obiang said.
Meanwhile, the West African country on Friday signed a series of preliminary agreements with Chinese energy companies on the sidelines of the fifth Forum on China-Africa Cooperation in Beijing. The agreements included a memorandum of understanding with Hong Kong-based Elegance Power to explore and develop onshore oil-and-gas blocks, electricity projects with China Machinery Engineering Corp. and a crude-supply deal with Sinochem Corp. in exchange for trade credit to pay for infrastructure projects.
Unlike the U.S. and other countries, China hasn't attached political or environmental strings to much of its aid.
"Equatorial Guinea remains mired in corruption, poverty, and repression under President Teodoro Obiang Nguema Mbasogo, who has been in power since 1979," the non-government organization Human Rights Watch said in its 2012 report. "Vast oil revenues fund lavish lifestyles for the small elite surrounding the president, while most of the population lives in poverty," it said.
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