China in the Middle East

Vol. 2. No. 16. April 29, 2023

From S.R.

China's success in reconciling Iran and the Saudis make Beijing a prime candidate for the dispute between Teheran and Kuwait. The dispute here is over the giant Dura gas field, which China hopes to tap into as part of any deal.

He said. She said.

"We will spare no effort to help them as and when needed."

Chinese Foreign Ministry spokeswoman Mao Ning says Beijing will also help evacuate non-Chinese nationals from war-torn Sudan.

Focus

The Next Step

In the aftermath of China's mediation between Iran and Saudi Arabia, Beijing has been planning a folo-up meant to expand its domination of Gulf energy.

China has been monitoring another border dispute in the Gulf that could result in tremendous energy resources. The issue is the maritime dispute between Iran and Kuwait that covers a joint energy field. Kuwait claims the Dura field while Teheran says the northern section belongs to the Shi'ite republic. Iran calls that section Arash.

In March, Iran and Kuwait held talks in an effort to reconcile differences that would enable the Gulf Arab emirate to begin development of Dura, discovered in 1967. This marked the first serious effort between the two countries since 2013, when negotiations collapsed in wake of opposition by the Kuwaiti National Assembly.

Diplomatic sources assert that the Iran-Kuwait talks could be bolstered by China. They point to China's hosting of reconciliation efforts by Iran and the Saudis just days earlier, which led to talks to reopen embassies and explore investment opportunities.

"China is providing security guarantees for the agreement," Ali Shamkhani, secretary of Iran's Supreme National Security Council, said.

Now, Iran and Kuwait could receive the same security guarantees for Dura. The field has natural gas reserves said to reach 20 trillion cubic feet, one of the largest in the Middle East.

Saudi Arabia has played a major role in Dura. In March 2022, Riyad and Kuwait agreed to develop the offshore gas field. The two parties signed a contract that included the state-owned Kuwait Petroleum Corp. and called for the production of 1 billion cubic feet of gas and 84,000 barrels per day of condensates.

Iran has termed the accord illegal because Teheran was left out. Iran threatened to unilaterally begin drilling and conducting seismic surveys in the field. In April 2022,  Kuwait and the Saudis invited Iran to delineate the eastern border of Dura. Still, Kuwait has insisted that the field is entirely Kuwait and Saudi.

But Iran can no longer be ignored and the Kuwaitis recognize this. Teheran was said to have been responsible for an attack on a Saudi oil refinery, and neither Kuwait nor Riyad has the military capability to stop future strikes.

“Kuwait hopes that the increasingly improving geopolitical climate in the Gulf will promote the development of its offshore gas fields," the Economist Intelligence Unit said.

China has been encouraging a reconciliation between Iran and Kuwait. In August 2022, Kuwait and Teheran resumed diplomatic relations, followed by talks on maritime borders. At the same time, Kuwait has been negotiating maritime borders with neighboring Iraq, said to have advanced over the last few months.

Don't expect any announcement of Chinese involvement in the Iran-Kuwait talks. As with the Iran-Saudi effort, Beijing will reveal its involvement when an agreement is reached.

What China hopes is that its quiet efforts would lead to being invited to develop Dura at a time of rising gas prices. This would mark a key element in Beijing's guarantees of any agreement of the field, vital to Kuwait, which battles a gas shortage.

"It is expected that Kuwait and Iran will resolve the border dispute between them during the years 2023-2027," the Economist said, "while the risk of a possible collapse of Saudi-Iranian relations remains. But if the agreement remains, then Saudi Arabia and Kuwait’s urgent need to secure new supplies of gas at reasonable prices indicates that the possibility of launching the process of developing the Al Durra field."

Ticker Tape

...The Chinese military has been evacuating nationals from war-torn Sudan. On April 27, the navy brought back nearly 700 Chinese and foreign nationals from Sudan to Saudi Arabia. The navy used two warships Officials said the navy established a security zone in Port Sudan to facilitate assembly and boarding. In all, around 1,500 Chinese have been removed from Sudan. China maintains a major presence in Sudan and controls much of that Arab state's energy sector.

...Beijing has been lobbying for intensified diplomacy on the Israeli-Palestinian front. China's envoy to the United Nations, Zhang Jun, says the international community cannot tolerate the rising violence in the West Bank and must make greater efforts to find a settlement of the Palestinian question. Zhang cited the Israeli police raid of Al Aqsa Mosque on Jerusalem's Temple Mount. The diplomat urged Israel to lift what he termed "unreasonable restrictions" on the movement of people and goods within the Palestinian community.

...China has maintained a major stake in Greece. Now,  Beijing wants to increase that. On April 25, a Chinese delegation arrived in Athens and met Greek officials on ways to bolster cooperation on shipping and trade. The two sides were said to have discussed additional Chinese investment in Greece, particularly the port of Piraeus, managed by Beijing.

...China and Morocco have been discussing regional cooperation. On April 22, delegates from both countries met in Beijing on Chinese investment in the North African kingdom. The Chinese side was led by Liu Jianchao, head of the International Department of the Communist Party Central Committee. Liu met Mohcine Jazouli, a minister that deals with Moroccan investment. Beijing has been establishing industrial facilities in Morocco for production throughout North Africa and Europe.

...China has launched another air cargo route to the United Arab Emirates. China's SF Airlines, with 81 aircraft, began round-trip cargo flights on April 27 from Wuhan to Abu Dhabi. The weekly flights can take up to 220 tons each and include general cargo, e-commerce goods and express shipments.