China's Wen presses Saudi Arabia for oil, gas access

 Published: 1/15/2012 1:08:04 AM GMT
Original Cached

BEIJING (Reuters) – Chinese Premier Wen Jiabao pressed Saudi Arabia to open its huge oil and gas resources to expanded investment from Chinese companies, media reports said Sunday after Wen began a trip to Middle Eastern energy powers.

In talks with Saudi Crown Prince Nayef in Riyadh on Saturday, Wen also said his government wants "reputable" Chinese companies to invest in Saudi Arabia's ports, railways and infrastructure, the Chinese Xinhua news agency reported.

The Saudi kingdom is already China's biggest source of imported oil, and securing energy security was high on Wen's agenda in Riyadh, perhaps reflecting worry about how nuclear tensions and sanctions that could unsettle imports from Iran.

"China and Saudi Arabia are both in important stages of development, and there are broad prospects for enhancing cooperation," Wen told Prince Nayef, who is a senior member of the Saudi government, according to Xinhua.

"Both sides must strive together to expand trade and cooperation, upstream and downstream, in crude oil and natural gas," said Wen, referring to access to extracting oil and gas and then processing the them.

"The Chinese government encourages strong and reputable Chinese firms to participate more in constructing Saudi railways, ports, power, telecommunications and other important infrastructure," added Wen.

Crown Prince Nayef is King Abdullah's half brother and became heir to the throne in October. The Xinhua report paraphrased the prince as saying that Saudi Arabia is willing to expand cooperation in energy and infrastructure.

China is already Saudi Arabia's biggest customer and the kingdom is keen to diversify its economic ties. But the Chinese report made no mention of specific energy or infrastructure deals with Saudi Arabia, the world's top crude exporter.

Saudi Arabia's state oil giant, Saudi Aramco (SDABO.UL), had said it would sign a final deal this weekend to build a 400,000 barrel-per-day oil refinery in Yanbu with China's Sinopec Group.

The Xinhua report did not directly mention any discussion of Iran, whose oil exports to China have come under pressure from new U.S. financial sanctions. The Obama administration wants Beijing to go along with the U.S. sanctions by cutting what it pays for Iranian oil, if not the volume it buys.

Western powers say Iran has been accumulating the means to make atomic weapons. Tehran says its nuclear aims are peaceful.

China already cut oil imports from Iran in January and February in a commercial dispute over contract terms, and has been looking for alternative supplies.

Wen said it was important for China and Saudi Arabia to keep deepening cooperation "in the face of changeable and complicated regional and international trends," reported Xinhua.

In the first 11 months of 2011, top supplier Saudi Arabia shipped 45.5 million tons of crude to China, a rise of 12.9 percent over the same period in 2010, according to Chinese customs data. Angola and Iran were China's second and third biggest suppliers.

Wen is also scheduled to visit the United Arab Emirates and Qatar.

(Reporting by Chris Buckley, Editing by Jonathan Thatcher)


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