Commerce ministry: China still expects Libyan oil

(Shanghai Daily)

08:07, August 24, 2011

China's government Tuesday urged Libya to protect its investments and said the oil trade benefited both countries, after a Libyan opposition figure warned Chinese and Russian oil companies could suffer after the ousting of Moammar Gaddafi.

The deputy head of the Chinese Ministry of Commerce's trade department, Wen Zhongliang, was responding to a question about the official at the Libyan opposition-run oil firm, AGOCO, who said Russian and Chinese firms could lose out on oil contracts for failing to back the rebellion against Colonel Gaddafi.

"China's investment in Libya, especially its oil investment, is one aspect of mutual economic cooperation between the two countries, and this cooperation is in the mutual interest of both the people of China and Libya," Wen told a news briefing in Beijing.

"We hope that after a return to stability in Libya, Libya will continue to protect the interests and rights of Chinese investors and we hope to continue investment and economic cooperation with Libya," said Wen.

If acted upon, the warning from Abdeljalil Mayouf, an information manager at AGOCO, would be a headache for China, which last year obtained 3 percent of its imported crude from Libya.

But his warning may not represent the position of an emerging, post-Gaddafi government in Tripoli. There is sure to be a cacophony of voices among opposition groups, said Yin Gang, an expert on the Arab world at the Chinese Academy of Social Sciences in Beijing.

"This was one individual's opinion. I can say in four words: They would not dare. They would not dare change any contracts," said Yin. 

He said Chinese companies have relatively few investments in Libya, where Western companies were favored even under Gaddafi in recent years.

"Libya is still in a state of chaos and hasn't formed a government. There are certainly different views among the rebels," he added.

China shipped about 150,000 barrels of oil per day from Libya last year through Unipec, the trading arm of Asia's top refiner Sinopec Corp, which holds the supply contract. That amounted to about one tenth of Libya's crude exports.

By Tuesday, the Libyan Embassy in Beijing had switched to using the red, black and green flag favored by the opposition in the North African country.

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