China’s Oil and Gas Footprint in Latin America and Africa

Abstract

Latin America and Africa’s large hydrocarbons reserves and China’s growing demand for oil have the potential of being a win–win. China’s state-owned oil companies have already acquired prime acreage and Chinese state banks also lent billions to oil-producing countries in Latin America and Africa during the opening decades of the twenty-first century in exchange for oil. China’s repeated oil deals with countries with a track record of poor governance performance has been much criticised and sometimes showcased as validation of Beijing’s larger geopolitical expansion interests. This paper argues that there is still not enough evidence to assert the truthfulness of that claim. By contrast, there are ample examples of governance problems in the oil producing countries China engages with in Latin America and Africa. The author analyses in particular poor performance shown by three governance indicators — transparency, accountability, and corruption— in the oil sector relationship between China, Latin America and Africa. She argues that it is ultimately the responsibility of host countries to take up the long-due task of tackling those weaknesses in order to take full advantage of a potentially promising oil relationship with China.