GLOBAL BUSINESS China searches world for oil to fuel hot economy

The Asian giant is now the world's No. 2 oil importer, behind the United States
DAKAR, Senegal (AP) -- The West African nation of Gabon isn't one of the world's more high-profile countries. So why a full-out state visit by China's leader?
That's easy: oil.
Burning fuel at a record pace to run an economy in overdrive, China since late 2003 claimed the No. 2 spot in world oil imports, second only to the United States. And jostling with the world's other oil gulpers to keep their machinery moving, China's leaders are looking far afield for a secure oil supply, locking down tough-term deals with easy-term cash.
China, the United States, Japan, Europe and, increasingly, India -- all growing leery of dependence on the volatile Middle East -- are elbowing each other in a rush to nontraditional oil sources in West Africa, the Caspian, Russia, South America and elsewhere.
Gabon visit
Which is what brought Chinese President Hu Jintao to Gabon last week, welcomed by 3,000 dancing Gabonese women and a 21-gun salute from Gabon's less than formidable military. Hu opened the three-day state visit -- his only sub-Saharan stop on a four-nation tour -- pledging lasting, lucrative friendship between resource-rich Africa and resource-voracious China.
China's broadening drilling and mining in Africa comes "with the aim of promoting development by the principle of 'win-win,"' Hu told Gabon's lawmakers. He spoke in a parliament building being rebuilt by no-interest Chinese loans.
On the sidelines, China, Gabon and France's Total Gabon oil firm signed a multimillion dollar series of deals guaranteeing China a set, steady flow of Gabonese oil. Despite any rival bids or Gabon's own declining supplies, "it means that Gabon will always have to make oil available ... to sell to China," Oil Minister Onouviet explained proudly on Gabonese radio.
The Chinese leader moved on to Algeria -- a north African nation absorbed in its struggle against a bloody Islamic extremist group, and a no-go zone for most world leaders. But Hu has a particular reason to visit Algeria -- the hundreds of millions of dollars China has invested in refineries there since last year.
Voracious appetite
China's economy is booming at 9.9 percent annually, with business and family-car ownership surging despite fuel supply-line kinks that had power plants sputtering.
China, with oil demand shooting up by 10 percent last year, and oil imports up by a record 30 percent, is driving global demand, hard.
"It's sucking up a lot of the world's oil resources," said Antoine Halff, demand specialist at the International Energy Agency. "It's a large market and steep growth, and it's not getting the oil it's looking for."
Until very recently, China, like the West and Japan, largely had been looking for oil imports where everyone else was -- the Middle East, source of 60 percent of Chinese oil imports. But increasingly, the world's powers are questioning the wisdom of leaving national economies to rest on the explosive region.
The result is an oil boom in places like West Africa. In Angola, Nigeria, Gabon and other oil-producing states, China and other Asian nations in 2003 competed aggressively with Europe and the United States for deals.
Fewer worries
It can be easier for China, which doesn't have to worry as much as Western oil companies about criticism of foreign partnerships, said Galvin Hayman of London-based Global Witness, which calls for transparency in international oil deals.
For example, when a Canadian company pulled out of Sudan in 2002 amid complaints oil was helping fund civil war, Asian partnerships led by China, India and Malaysia in 2003 moved in.
"China has a willingness to go to places where others may have constraints -- in the Sudan, for instance," said Halff, with the International Energy Agency.
"They have their agenda, and they are acting according to their agenda," Halff said. "Their primary concern is to ensure sufficient supply, and sufficient diversified supply."
But industry analysts say China today may be sinking some of its money into questionable sources of supply such as Kazakhstan, Peru, and Gabon. Exploring wells now increasingly are coming up dry -- suggesting Gabon may soon be tapped out.