U.S./Saudi/Chinese Five Billion Dollar Energy Deal

Last year King Abdullah traveled to China for his first foreign visit after assuming the throne. The trip was characterized as a “watershed” and, as Jean Francois Seznec told SUSRIS last month, signaled that Saudi Arabia’s future involved “being much closer to Asia.” At the time of the visit there were reports of pending deals among Chinese, Saudi Arabian and American energy organizations for joint ventures in China. This week one of those deals, the first “fully integrated refining, petrochemicals and fuels marketing project with foreign participation” was formalized in Beijing.
continues to expand sources and infrastructure to meet its sizzling energy demands that have seen it surpass Japan as the number two oil consumer and the world’s third largest oil importer. Its burgeoning requirements, which are a major factor in managing global energy supply and demand, were highlighted in a report titled, “China’s Search for Energy Security: Implications for U.S. Policy” published by the National Bureau of Asian Research last year. The authors noted, “China’s strong economic growth is spurring a concomitant growth in energy demand that together are outstripping energy supply and infrastructure capabilities. This supply-demand gap will become more acute over time, particularly in light of the fact that, ever since 2000, China has become far less efficient in energy use per incremental dollar of (GDP). Oil is a particularly sensitive problem. Over the next fifteen years, demand is expected to roughly double. By 2020 China will likely import 70% of its total oil needs, compared to 40% today.” The implications for Saudi Arabia and the United States are obvious.

We are pleased to present for your consideration a report provided by Arab News on the specifics of the newly announced deal.

Saudi US Relations