China turning to U.S. for oil and expertise

As Chinese energy demand continues to grow, the Asian giant has begun to turn to the U.S. as a means to ease its tight fuel markets, according to the Houston Business Journal.

A recent study from Rice University investigates the disparity between innovation within the oil and gas exploration industries in the U.S. and China. Both countries boast substantial deposits of shale gas and oil, but China has faced major difficulties with the technical aspects necessary to tap into these reserves.

To help take full advantage of its energy resources, China has begun to create more partnerships with U.S. companies, taking stakes with U.S. and Canadian oil developments rather than continuing its practice of investing in less politically stable regions that others have been wary of entering.

"China is learning that owning equity oil in risky regions may not be as effective an energy security strategy as it had previously imagined," Amy Myers Jaffe, one of the study's authors, told the Journal. "China is now finding itself mired in more energy-related foreign diplomacy than it bargained for.”

Agence France-Presse reports that Beijing continued these efforts on Monday, dispatching an envoy to Sudan and the recently independent South Sudan, where the Sudanese government has acted to block important Chinese oil exports.

Up-to-date analyses of the Chinese oil market can be found in PennEnergy's Research area.

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