A
number of energy agreements were signed on Monday (November 21) as Premier Wen
Jiabao wrapped up his visit to Brunei, the first by a Chinese premier to the
Southeast Asian nation.
A memorandum of understanding covering energy
cooperation between the two governments was among the documents signed at
Brunei Palace.
China National Offshore Oil Corp (CNOOC) also
signed a deal with Petroleum Brunei for "gas and oil commercial
cooperation". No details of the two documents were released, while CNOOC
gave no further information to China Daily.
Brunei is the third-largest oil exporter in
Southeast Asia and the world's fourth-largest natural gas exporter.
Though it has a territorial dispute with China
over a small area in the South China Sea, Brunei has maintained a low-profile
stance on the issue and stressed it should be settled through mutual consultation.
Other cooperation documents ranged from
forestry to health. The premier and Sultan Hassanal Bolkiah officiated at the
signing ceremony.
During Wen's two-day stay in Brunei, according
to the Borneo Bulletin newspaper, Brunei Shell Petroleum also signed a
non-binding memorandum of understanding with China's Zhejiang Hengyi Group to
supply crude oil to a $6 billion refinery, planned in Brunei, and purchase oil
products from the plant.
Zhejiang Hengyi and China's Sinopec
Engineering Inc had earlier agreed to develop an oil refinery and aromatic
cracker plant in Brunei's Pulau Muara Besar, an island situated in Brunei Bay.
The project will be the largest Chinese
investment in Brunei to date.
The refinery project was expected to aid the
growth of Brunei's energy sector through the production of petrochemicals and
the creation of opportunities for other downstream industries, the report said,
quoting a statement from the Brunei Economic Development Board.
The facilities would involve an initial investment
of US$2.5 billion and have a production capacity of about 135,000 barrels a
day. A further $3.5 billion would be invested during the second phase to expand
the facilities.
The whole project will create about 1,200 job
opportunities in the country with a population of 406,000.
"We are confident in making this a
world-class project," Qiu Jianlin, Zhejiang Hengyi Group's chairman, was
quoted as saying.
He said his company is on target to begin
construction work in Brunei next June.
During a speech at Universiti Brunei
Darussalam shortly after his arrival in Brunei on Sunday, Wen proposed
deepening economic ties with Brunei, including cooperation in offshore oil and
gas exploration, as well as upstream and downstream energy cooperation.
China has insisted that territorial disputes
in the South China Sea should be settled through negotiations between countries
directly involved. It has also proposed to "put aside disputes and engage
in joint exploitation" in the disputed area.
Wen went to Brunei to celebrate the 20th
anniversary of the establishment of diplomatic ties, after three days on the
Indonesian resort island of Bali attending the Asean and East Asia summits. The
premier arrived in Beijing on Monday afternoon.
Luo Yongkun, a Southeast Asian studies fellow
with the China Institutes of Contemporary International Relations, said China
is consistent in its stance toward exploiting resources in the South China Sea:
any operation should be mutually beneficial and not destabilise the region.
The gas exploitation, if it is in the South
China Sea, could offer an example for other disputes in the region, according
to Luo.
"Only through tangible cooperation can we
have the chance to understand each other and prove that projects can benefit
both parties," Luo said. "Without such efforts, trust cannot be
built."
Li Xiaokun
China Daily
Reuters, Zheng Yangpeng and Zhou Yan in
Beijing contributed to this story.
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