Chinese national oil companies and the economic development of African oil producers

After decades of being regarded as 'basket cases' some African economies are experiencing growth rates that are among the fastest in the world. Much of this growth is based on the export of commodities, like oil, to China and other emerging economies. Driving this engagement are Chinese national oil companies (NOCs) that have grown up through China's reform period and, as such, carry with them many key features of the 'China model'. While we hypothesise that the Chinese do things 'differently' to other oil investors in Africa we do not know whether the different corporate strategies of the leading Chinese NOCs and the specificities of African political economies they engage with generates unique forms of development, and if so in whose interests? Crucially it is a mistake to see this as one-way traffic with Chinese firms entirely determining the agenda. Our past ESRC-funded research reveals the importance of African agency in shaping the terms of this engagement and with it the potentials for development. In terms of DFID-ESRC's priorities the project addresses Chinese FDI, resource-based growth models, and infrastructure given that many Chinese oil deals are tied to infrastructure.

This project will be the first to assess whether and how such developmental benefits may be occurring. We will start by investigating the Chinese NOCs and their relationships to key state and semi-private agencies in China, before undertaking field research in Africa. Important here are the complex 'packages' of aid, trade and investment in Africa through Chinese NOCs, banks and ministries. Chinese NOCs are active across Africa but three countries - Ghana, Angola and Sudan - represent different aspects of their engagement with the continent. These countries are also unique so these contextual differences 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. We will also assess their impacts and the extent to which the growth they generate - directly, through oil-backed infrastructure, and via state revenue - trickles down to Africa's poorest.

Data collection will be both quantitative and qualitative; the former being data sets on Chinese FDI and African social indicators, and the latter interviews with key Chinese and African actors. To successfully carry out this data collection in countries and an industrial sector renowned for lacking transparency we will work with partners who have track-records of research in this area, and are embedded in key policy circles which will maximise the impact of our research.

Having established the drivers, dynamics and impacts of these investment flows we will address the needs of various users of knowledge. Academics across a range of disciplines will benefit from new knowledge of the character of these flows and impacts, as well as rethinking debates on the nature of international relations, resource-based development and the role of 'Southern' actors in that. National and international policy-makers will benefit from better information about the nature of these oil-related trade and investment flows, as well as benefitting from the recommendations we make for interventions that could enhance the mutual benefits from these new business relations. International and African business people will benefit through greater knowledge of the opportunities available, but also about how to do business in such complex cross-cultural settings. To achieve this, the research team will deliver bespoke training programmes on Chinese NOCs and local linkages. Finally, the general public will benefit from better-informed debate about the nature of Africa's development, and the real costs and benefits of actors like the Chinese. The Open University, where the core team is based, has wide experience of engaging the public in learning about the world and will produce a MOOC on oil and development in Africa.

This project will have early impacts, derived from completion of the research, and long-term impacts, accrued from the influence on policies and corporate strategies in China, selected African countries, and some advanced economies.

Early impacts will arise from a detailed understanding of the different motivations, roles, and impacts of Chinese national oil companies (NOCs) in our case study countries, and the role played by Africans in shaping this engagement. The beneficiaries and benefits are:

1. Policy-makers and NGOs in the African case study countries, China, and Europe. The economic and social benefits will be greater awareness of how NOCs operate, their impacts, and the role of African states in brokering these relationships and in using oil revenue for development. This will be achieved through the advisory group that has direct links to policy channels, and targeted workshops and policy briefs during the project's life.
2. African and Chinese NOCs, other international oil companies, and sub-contractors to the sector. The economic benefits will be detailed knowledge of inter-firm linkages and the possibilities for local content in Africa. Through policy briefings, local workshops involving oil industry representatives, and executive training programmes the research will provide greater knowledge of opportunities in the sector and how these can be effectively exploited.
3. The general public. There is much misinformation about Chinese firms, African elites, and resource-based development. The research will create social benefits through informed debate on China's entry into Africa and how it might be best managed for economic development. The researchers, and the OU more generally, have unrivalled experience in engaging publics through diverse media. We will engage publics through blogs, a MOOC, and a communication strategy developed with the OU's media team.
4. Academics working in the fields of development studies, law, management, and international relations. To date we lack detailed knowledge of how Chinese NOCs operate in Africa and with what impacts. We will contribute new empirical evidence about these flows and their implications through presentations, existing networks, and journal papers.

Long-term impacts build on our empirical understanding of changing oil sector dynamics in Africa and their impacts on African economies:

5. Policy-makers and NGOs in the African case study countries, China, and Europe. Building on the short-term impacts we intend to provide longer-term advice to policy makers working in UN organisations (UNIDO, UNCTAD), multilateral agencies (EU, World Bank), national organisations (e.g. DFID, UKTI, CADFund), and NGOs (e.g. The Asia Foundation, China Foundation for International Strategic Studies, Chatham House) by disseminating recommendations for how to maximise the mutual benefits of these important trends.
6. Existing and potential investors in Africa. Our hypothesis is that potential exists for mutual engagement between Chinese NOCs, international oil companies (IOCs), African NOCs and a range of suppliers and service firms. Together, and managed properly, collaboration between these enterprises can benefit African economies. By providing executive training in oil sector dynamics/linkages we hope to assist new investors in Africa's growing number of oil economies. Using the skills of Dundee we will design training programmes aimed at NOCs, IOCs and, critically, African SMEs who might supply the oil sector.
7. Academics working in multiple disciplines. While our early findings will be theoretically driven, they will not explicitly seek to evolve wider framings of international development. Through a monograph published within 2 years of the project's end we will shape emerging debates around resource extraction, new axes of 'South-South' investment, and development. A submission to the UK Data Archive will also ensure that the data is available for future researchers.