The China Signal - May 6
Argentina's Bioceres' drought-resistant soy bean approved for China import
G’day, and welcome to The China Signal. This week, Argentine biotech firm Bioceres gains Beijing’s approval to import its drought-resistant soybean; Beijing pledges to create a disaster relief fund for the Caribbean “without any political strings attached”; commercial scale oil production begins at Brazil’s Mero pre-salt field, with CNPC and CNOOC as minor stakeholders; plus more. Read on.
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On Friday April 29, Argentine biotechnology firm Bioceres Crop Solutions Corp scored a big win after China’s Agriculture Ministry approved imports of the company’s drought-resistant HB4 soybean strain, the first soy of its kind available to farmers.
China’s endorsement - the world’s largest consumer of soybeans - is expected to bring broader acceptance for the genetically modified seeds around the world, especially when global agriculture supply chains are endangered by the Russia-Ukraine conflict. According to Bioceres, the technology promises higher yields for farmers, with expected gains of more than 13 percent compared to standard technology.
~Above for the full Spanish article~
On Thursday May 5, Argentina’s Minister of Agriculture Julián Domínguez, received the Chinese Ambassador to Buenos Aires, Zou Xiaoli, to discuss the bilateral trade agenda and technology transfer following the recent approval by the Asian country of HB4 soybean strains.
An agreement to put together a long-term agricultural plan incorporating the Belt and Road Initiative (BRI) agreement signed in early February was reportedly attained.
Further talks included China’s intention to increase investments to Argentina in agricultural production, science and technology, and to advance squid fishing and fertilizer export agreements. (RP)
China 🇨🇳 + Caribbean 🏝️
On Friday April 29, China unveiled the intent to sponsor a disaster relief fund for Caribbean countries. The move was announced during a virtual summit between Chinese Foreign minister Wang Yi and his counterparts from nine local countries - Antigua and Barbuda, the Bahamas, Barbados, Dominica, Grenada, Guyana, Jamaica, Suriname, and Trinidad and Tobago. Wang stressed that:
“China will continue to provide economic and technical aid to Caribbean countries without any political strings attached”.
No economic details of the fund's planned extent were released at this stage. Per Inter-American Dialogue estimates, China has provided approximately US$4.2 billion in low-interest loans to the nine countries up to 2021, including $2.1 billion to Jamaica to build new roads, bridges, a convention center, and a children’s hospital. (RP)
The National Assembly approved on Tuesday the exemption of visas for diplomats from China, a country with which it re-established relations last December.
La Asamblea Nacional aprobó este martes la exoneración de visas para los diplomáticos de China, país con el que restableció relaciones en diciembre pasado.
With a total of 88 votes in favor, the so-called "Agreement between the Government of the Republic of Nicaragua and the Government of the People's Republic of China, on the mutual exemption of visas for bearers of diplomatic, official, service and affairs passports" was endorsed.
Con un total de 88 votos a favor, se avaló el llamado "Acuerdo entre el Gobierno de la República de Nicaragua y el Gobierno de la República Popular China, sobre la exoneración mutua de visas para portadores de pasaportes diplomáticos, oficiales, de servicios y asuntos públicos".
Brazilian state-owned Petrobras has initiated commercial-scale oil production from the Mero pre-salt field (Santos basin, offshore Brazil), where it leads an international consortium.
With its 38.6% stake, Petrobras is partnered by Shell, TotalEnergies (19.3% each), China National Petroleum Corporation (“CNPC”, see TCS April 23 background), and China National Offshore Oil Corporation (“CNOOC” * see backgrounder below), who both hold a 9.65% stake.
The Guanabara Floating Production Storage and Offloading (FPSO) - the first of four large units that will be deployed at Mero along with FPSOs Sepetiba (2023), Marechal Duque de Caxias (2024), and the Alexandre de Gusmao (2025) - arrived in late January and has a processing capacity of 180,000 barrels per day of oil and 12 million cubic meters per day of natural gas.
The field is estimated to hold 3.3 billion barrels of oil in recoverable reserves, with natural gas to be reinjected back into the reservoir. Patrick Pouyanne, Total Energies chief executive, stated that with the addition of the other three FPSOs, which are under construction, production will exceed 650,000 barrels per day by 2026. Production from Mero first started in November 2017 through Pioneiro de Libra FPSO.
Brazil's direct sales of crude will more than double this year and rise sharply this decade, as oil majors deliver more of their output to the government under production sharing agreements… Government-owned volumes, until now nearly irrelevant, are ramping up and will reach 1.127 million barrels per day (bpd) by 2031, according to Eduardo Gerk, head of Pré-Sal Petróleo SA (PPSA), the state-run company that oversees the country's production-sharing contracts.
Brazil produces about 3 million bpd of crude today, with the government stake responding for less than 1% of the total. The government stake is projected to rise to about 20% of the country's total production in 2031, when total country production is estimated at more than 5 million barrels per day of crude.
Background: China National Offshore Oil Corporation (“CNOOC”) 🔍
Headquartered in Beijing, CNOOC is a state-owned oil company. Established in 1982, it is not publicly traded. However, two of its seven subsidiaries, CNOOC Limited, and China Oilfield Services (“COSL”) are listed on the Hong Kong exchange and on the Hong Kong and New York exchanges respectively.
The third-largest national oil company after CNPC and China Petrochemical Corporation, CNOOC is China's largest offshore oil and gas producer.
Present in 40 countries, it ranked 92nd on Fortune’s Global 500 2021 List with revenue equivalent to US$83 billion. In December 2020, CNOOC was listed as a Communist Chinese military company by the U.S. Department of Defense, and is currently in the U.S. Department of Commerce’s Entity List. (RP)