BP’s $20 Billion Leads Deals as China’s Li Visits U.K.Robert Hutton and Eduard Gismatullin
BP Plc signed a $20 billion deal to supply liquefied natural gas to China National Offshore Oil Corp., one of a number of contracts announced during a visit by Chinese Premier Li Keqiang to the U.K.
The 20-year agreement will see 1.5 million tons of LNG shipped to China each year from 2019, BP said in a statement. The contract with the U.K.’s second-largest energy producer shows China’s appetite hasn’t been sated by a $400 billion pipeline deal it made with Russia last month. Royal Dutch Shell Plc also signed a strategic alliance agreement.
“China knows the challenges it faces in meeting the energy needs that underpin its economic growth,” said David Elmes, who heads the Global Energy Research Network at the University of Warwick. China is moving to gas to contain the pollution that comes from dependence on coal-fired plants, he said.
Shell’s agreement with the Chinese company is for exploring opportunities in “upstream, midstream and downstream,” Shell said in a statement, without elaborating.
Deals from energy to finance totaling $30 billion will be announced in the next two days, according to China’s embassy in London. Li’s visit ends a three-year diplomatic freeze caused by U.K. Prime Minister David Cameron’s decision to meet the Tibet’s Dali Lama.
China Minsheng Investment Corp., the country’s largest private-sector investment group, will pledge $1.5 billion for industries including financial services and offshore engineering and open its European headquarters in London, Cameron’s office said in a statement. The U.K. wants to begin discussions about ending a 30-year-old ban in China on importing British beef and lamb.
BP Chief Executive Officer Bob Dudley said in Moscow earlier today the LNG contract would be valued at about $20 billion.
For its part, Britain said last night it will make it easier for Chinese visitors to apply for visas. Home Secretary Theresa May announced easier forms for visa applicants from China and an agreement to allow travelers from China or India to come to the U.K. on an Irish visa.
Improving the visa system was on a list of requests from Liu Xiaoming, the Chinese ambassador in London. While Chinese travelers can visit most European Union countries on a single visa, they need a separate one to enter the U.K.
“I receive complaints from businesses based here,” Liu told reporters this week. “They have difficulties to rotate their senior executives because of visa restrictions. So that made their operations more difficult than they are in other European countries. Visa issues really erode British strength in terms of attracting more foreign businesses.”
Liu, who also said China wanted the U.K. to build a third runway at London’s Heathrow airport, held out the visit as an opportunity to reset relations between the two countries.
Li, who arrived in London late yesterday, met Queen Elizabeth II at Windsor Castle today before traveling to London to see Cameron at his Downing Street residence for a lunch attended by senior U.K. ministers and business leaders from both countries. Li will be joined by more than 200 Chinese business leaders, including the chairmen of most of the country’s biggest banks.
Nord Engine, a Chinese financial-services group, will announce 150 million pounds ($250 million) of funding to invest in small and medium-sized British and European companies. The investment is among at least $30 billion of deals in industries including energy and finance that Liu said will be signed during the visit.
In an article for the Times newspaper yesterday, Li said he wanted to change “mis-perceptions and misgivings” about his country.
Cameron visited China in December for the first time in three years, and was greeted with an editorial in the state-run Global Times newspaper stating that Britain “is just an old European country apt for travel and study.” In 2012, he was told he had “seriously damaged” relations by meeting the Tibetan spiritual leader, the Dalai Lama.