£1million study to examine implications of Chinese oil investment in Africa

Published On Fri 6 Feb 2015 by Grant Hill

A consortium led by the Open University and the University of Dundee has been awarded almost £1million to carry out research into the role of Chinese national oil companies working in Africa.

The two institutions will share £939,441 to investigate the strategies pursued by these companies and their likely implications for economic development in Africa. The three-year study will be supported by Peking University, the Chinese Academy of Social Sciences, the China National Petroleum Corporation’s Economic and Technology Research Institute, and African partners.

The Dundee team is led by Dr Janet Xuanli Liao from the Centre for Energy, Petroleum and Mineral Law and Policy, and members include Dr Xiaoyi Mu, Dr Ariel Bergmann, Dr Elizabeth Bastida and Dr Manny Macatangay.

China’s increasingly close engagement with the African continent has triggered considerable controversies over the past decade. It is recognised the Chinese employ different corporate strategies from other oil investors in Africa, and the research team will investigate whether these differences, and the specificities of African political economies, generate unique forms of development and, if so, in whose interests.

Studies to date suggests that, rather than being a one-way flow of investment, African institutions have played an important role in shaping the terms of this engagement and with it the potential for development.

Dr Liao said, “Our project will be the first to assess in a systematic way whether and how such developmental benefits may be occurring. We will start by investigating the driving forces behind Chinese national oil companies dealing with African oil producers, and the complex packages of aid, trade and investment in Africa through Chinese NOCs, banks and ministries. 

“We have selected three countries - Ghana, Angola and Sudan – as case-studies, as they have all attracted significant investment from China but have represented different aspects of Chinese engagement with the continent. These countries are also unique from each other which will allow us to examine the role that African agency plays in shaping the nature of and benefits from this new investment in their oil sectors.

“Finally, we will assess the impacts of the Chinese NOCs on economic development of these countries and the extent to which the growth they generate – directly, through oil-backed infrastructure, and indirectly, via state revenue – boosts the economies of certain African oil producers and benefits those at the lower rungs of the social ladder.”

Funding for the project has been provided by a joint Department for International Development (DFID)-Economic and Social Research Council (ESRC) research grant.

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