China offering credit for oil

China is trying to lock up energy reserves across the globe by offering much-needed credit to governments, the Wall Street Journal reported. The latest is a US$10 billion oil-for-loan deal between Kazakhstan and China announced on Friday. Kazakhstan will receive cash for new investment projects and China will get a 50% stake in a major Kazakhstan oil producer and priority on future energy cooperation. China has already struck similar deals this year with state oil producers in Russia, Brazil and Venezuela. In February, China Development Bank extended a US$25 billion financing package to Russia’s state-owned OAO Rosneft, its biggest oil producer, and OAO Transneft, its oil pipeline operator, in exchange for a commitment from Russia to send 300,000 barrels a day to China through a pipeline under construction. Bankers familiar with the deals said that while Beijing prefers financing acquisitions that give Chinese oil firms direct ownership of resources, it will extend loans to foreign national oil companies directly if the deals provide Chinese oil companies special access or guaranteed oil supplies.