China Pinched by Declining Oil Production in Angola
According to a recent piece published in the Financial Times, oil production in Angola has struggled to keep up pace, dropping to 1.65 million barrels per day, down from 1.85m b/d in 2010. Although the African nation makes up only 2% of global oil production, back in 2008 Angola became the largest supplier of crude oil to China, marking a major milestone in Beijing’s expansionist foreign policy.
Despite lending Angola nearly $15 billion since 2002 to develop oil production, and purchasing about 45% of the country’s output, some observers believe that Beijing’s political influence, or “soft power,” has failed to gain traction, as the majority of jobs created in the industry were given to imported Chinese workers.
The fall in production, which is apparently due to several offshore blocks going off and failures to get other projects online, has prompted China to pursue larger purchases of Nigerian crude usually exported to Europe, pushing the price of the Brent further up.
This dip in production should be temporary with a number of major projects coming online, but given how active Brazil has become in building ties with Angola, the competition in this market could be heating up, indicating that China’s influence is likely to face a serious challenge in coming years.