Chinese National Oil Companies in Ghana: The Cases of cnooc and Sinopec

Abstract

This article uses the case of Ghana to provide insight into the policies and strategies used by, as well as the cooperation between, Chinese state actors in their quest for natural resources in Africa. In 2007, Ghana discovered commercial quantities of oil. While the so-called Jubilee oilfield was initially divided amongst primarily Western oil companies, in 2010 the China National Offshore Oil Corporation partnered with Ghana’s national oil company to try and purchase a stake in Jubilee. Although this bid was rejected, later that year a second Chinese state-owned oil company, Sinopec, was able to access Ghana’s oil indirectly through an offtaker agreement, linked to a $3 billion dollar loan provided by the state-owned China Development Bank. The article uses these two cases to examine the level of coordination between the strategies of Chinese state actors in their attempts to access African natural resources. It shows that China’s national oil companies and policy banks operate in increasingly autonomous ways. This goes against the developmental state thesis, which argues that the Chinese state has full control over the overseas activities of its state actors. The article also shows that national political institutions in Africa can make use of and are able to influence Chinese resource deals, countering the notion of African passivity.

Party Politics and the Political Economy of Ghana’s Oil

“…In Ghana's context, Odoom (2015), Hardus (2014), and Phillips et al (2016) have focused on the engagement of transnational capital in the oil sector. Odoom (2015) examined Chinese engagement in Ghana's energy infrastructure and concluded that the deals favoured by the Chinese are appealing to both the Chinese and their African counterparts.…”

“…The idea of 'quick and dirty' deals speaks to NPP interests such as the well-documented case of the E.O. Group (Hardus 2014, Phillips et al 2015. In 2004, the NPP government granted an oil block licence to the E.O.…”

“…The proposed amendment received overwhelming support from ruling NDC MPs, and the debates that ensued followed a strict party line. The issue was eventually put to a vote, which the NDC won, and which gave them the green light to use future oil revenues as collateral for loans in, particular the large Chinese loan discussed by Hardus (2014).…”

Is China eroding the bargaining power of traditional donors in Africa?

“…62 In the case of the infrastructure loan, it is stipulated that 60 per cent of the contracts must go to Chinese companies, the main player being China's second-largest national oil company, Sinopec. 63 A word of caution on the volume and nature of these two loans is warranted, however. Both agreements were originally widely reported as being ODA-like and thus were included in datasets on Chinese official finance, including Aiddata.…”

Global political economy and Frontier economies in Africa: Implications from the oil and gas industry in Ghana

“…Although quite a small body of work typically looking at communication strategies of Tullow Oil headquartered in the UK (Ampofo-Bekoe, 2014) and Chinese oil companies, their strategies, and how they are perceived in Ghana (Rupp, 2013;Hardus, 2014), this body of work has dispelled widespread myths. For instance, in looking at how Chinese oil companies such as China National Offshore Oil Corporation and SINOPEC have been working with the Ghanaian authorities and how such relationships have succeeded or failed in terms of how they have been received by the Ghanaian public but also in terms of long term energy strategy of the two countries, it shows that the oil companies are fairly independent of the Chinese state.…”