Saudi king, China sign energy deal
Both sides seek to use their burgeoning oil biz as basis for broader economic and diplomatic cooperation.india Updated: Jan 23, 2006 17:52 IST
China and Saudi Arabia signed several deals on Monday, including one on energy and possibly a refinery, during King Abdullah's first official visit to the world's second-biggest oil consumer.
The king met Chinese President Hu Jintao in Beijing on Monday afternoon as both sides sought to use their burgeoning oil business as a basis for broader economic and diplomatic cooperation.
"We hope this cooperation will develop even more in the future," King Abdullah said. "We emphasise (that) we praise the important role China plays regionally and internationally."
Hu said the king's visit showed Saudi Arabia's emphasis on strengthening its ties with China, adding: "I believe your majesty's visit will play an important role in pushing forward relations between the two countries."
Saudi Arabia is already the largest supplier of oil imports to China, which has been scouring the globe for crude to feed its booming economy, tempting potential partners with the prospects of its huge market.
"China is one of the most important markets for Saudi oil and Saudi oil is one of the most important sources of energy for China," said Saudi Foreign Minister Prince Saud al-Faisal.
Saudi Arabia supplied nearly 440,000 barrels per day (bpd) of oil to China in the first 11 months of last year, 17 per cent of China's imports.
Al-Faisal said the energy deal set a "framework" for investment, but actual investment would have to come from companies, adding Saudi and Chinese firms had extensive contacts.
Details on the energy deal were not immediately available.
A member of the king's delegation, who asked not to be identified, said the agreements likely included a refinery deal, but did not elaborate.
Chinese refineries find it difficult to handle Saudi Arabia's heavy crude. So Saudi Arabia is likely to find a larger market for its oil in China if it invests in processing plants.
Last year, Saudi Arabia signed a $3.5 billion deal with Exxon Mobil Corp and Sinopec, China's top refiner, to expand a refinery in southern Fujian province.
The Saudis are also in talks with Sinopec about investing in a plant in the northern city of Qingdao. Industry officials have said Beijing aims to boost Saudi crude imports under term deals next year to limit the impact of spot buying on volatile prices.
King Abdullah will meet Premier Wen Jiabao and China's top legislator, Wu Bangguo, on Tuesday.