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Notes From The Editor

Editorial: Currying Favour With The Dragon: Drams, Drivers & Crude

Contributor: Tim Haïdar, EIC
Posted: 11/04/2013
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742-years ago, a teenage Marco Polo would set out from Italy with his father and uncle on a voyage of discovery into Asia. A quarter of a century and 15,000 kilometres later, they would bring back paper, pasta and a host of luxuries from porcelain to jade

In 2013, First Minister of Scotland, Alex Salmond would spend 12 hours on a plane between the UK and Beijing in a pre-Independence vote "inverse Polo" voyage, taking with him two of Scotland’s greatest exports – whisky and oil and gas expertise.

This morning, Mr Salmond and a 30 company delegation met with Yang Jie Chi, China’s principal foreign minister, in a forum focused on increasing Sino-Scottish collaboration. Scotland’s trade with China has doubled in the past half-decade and uisge beatha is a big part of that, accounting for $6.86 billion last year.

However, aside from the two nation’s mutual love of a few wee drams and a 9-iron and 18 holes, the main points of conversation will be increased cooperation in the oil and gas and construction sectors.

The fragility of Chinese domestic production was exposed in August as flooding shut down production in more than 1,200 oil wells causing a 300,000 barrel per day or seven per cent deficit in national oil production.

The Energy Information Agency (EIA) expects China to import about 75 per cent of its crude oil by 2035. The recent purchases of Nexen and Talisman for a combined $16.6 billion, already see Chinese companies in ownership of eight per cent of North Sea oil production and this trend will no doubt continue in the coming decades.

Mr Salmond is not the first, and will not be the last man to curry favour with the world’s up-and-coming economic powerhouse, but maintaining the symbiosis of this relationship will might be tricky in the long-term.

Marco Polo brought wonders back from the Orient, the Orient wondered what it had got in return…..

Contributor: Tim Haïdar, EIC