It is a fact that aptly demonstrates China's growing thirst for oil, and its ability to look far and wide to quench it. Currently the world's second largest energy consumer, the country's oil demand jumped about 6 percent in 2011, according to the International Energy Agency.
Premier Jiabao also visited Abu Dhabi. Petrochina now has almost 20 separate companies incorporated in the UAE, employing 1,000 people — five years ago it had none.
In the UAE, the Abu Dhabi National Oil Company recently announced that it would provide 200,000 barrels of oil per day to the state-owned China National Petroleum Corporation from 2014, representing a huge leap in shipments to the world's second largest economy since the two companies agreed to cooperate on oil trading, shipping and storage two years ago.
Beijing needs to incorporate quality and service into its sales pitch rather than cost advantage alone.
The country's state-controlled companies, which include CNPC, China National Offshore Oil Corporation (CNOOC) and China Petrochemicals Corporation (Sinopec), had spent most of the last decade purchasing assets in Africa and Central Asia, which produces similar oil to China's own domestic crude.
But in recent years, and especially with the opening up of Iraq, they have been driving into the Gulf, which holds some 70 per cent of the world's known hydrocarbon energy reserves, and are competing with their Western counterparts which have traditionally dominated that space.
This is a reality that we now have to accept and adapt to.
As an example, Baoji Oilfield Machinery, a subsidiary of CNPC, won its first contract in Abu Dhabi in 2009 to supply oil rigs for onshore drilling.
China is a consumer of energy more than it is a producer of energy.
The companies that have emerged to service China must now move away from their dependency on cost being their sole advantage.
They will need to develop and utilize their own proprietary technology, enforce international intellectual property laws and upgrade their quality so that they can compete on a level playing field with some of the world's better known product suppliers.
China is well placed to make this transition as it remains a part of the world where education is a fundamental gateway to the prosperity of the future, and so young people are encouraged to go to university overseas.
That is a resource that the international energy industry, which is desperate for new talent to counter the potentially catastrophic combination of an ageing workforce and the drastically reduced numbers of energy related graduates emerging from northern and western universities, has not yet tapped into.
Traditionally international oil companies and energy services firms didn't look to China for reservoir engineers, geo-scientists or environmental engineers because the Chinese education system didn't encourage students into such areas as the indigenous industry was not that mature — but that has all changed in recent years.
International energy companies need to adapt and develop their own revised version of internationalizing that befits the energy era we are now moving into — in time it should be near to impossible to say that X global energy company is from Y country. Everything about a global player should be global, with their brand bolstered by adopting best global practices and the best global talent wherever it originates. That goes for the Chinese as well as the Western firms.
In the 20th Century growth story, the world looked to the West (Europe) and the North (US).
As a result most global firms had a strong associated position in these regions because this is where the economic opportunity stood. But what we are now clearly witnessing is the emergence of a new trade route from the South to the East with a conveyor belt moving in both directions, which goes all the way from Brazil through Africa into the Middle East and on to the emerging regions of Asia.
The first wave of Chinese energy companies arriving in the Middle East have competed the old fashioned way by under-pricing all other competitors.
Playing the traditional Chinese cost card has secured much business for amongst others Chinese drilling companies in Iraq, such as Antonoil International, but that can't last.
It is clearly a short-term advantage. Low-cost labor has been an advantage which the Chinese economy has had for a very long period of time. But in terms of macro-economic statistics, China is changing rapidly and plans significant reforms over the next five years as the country tries to move away from an export-dependent economy to one also built on a pillar of domestic consumption.
The cost base will rise dramatically as one of the central tenets of the government's latest five-year plan adopted in March this year is to double workers' salaries by 2016 and provide pensions to almost half a billion people. That will obviously make competing on labor costs with international competitors a much more even playing field.
We all know from anecdotal evidence and experience that if the Chinese move into a market place then they can potentially dominate it. That said, I think dominating solely on a cost mantra is not sustainable, but as Chinese companies internationalize, opportunities for partnership will emerge.
Chinese businesses operating in the Middle East, especially those in the energy industry, are increasingly focused on delivering quality and they are beginning to focus significantly on service, which is the most challenging of all, by complementing their own drive and ambition with the experience of targeted expatriate talent from their existing Western competitors.
International energy players are well placed to integrate with Chinese companies who are eager to work with them to achieve this transition quickly and effectively.
It is a win-win for all parties to supply what will soon become the world's biggest energy market of some 1.5 billion people.
The posture has to move from not looking to beat or be beaten by the Chinese, to one of joining them.
— James McCallum is chief executive officer and co-founder of Senergy, a global energy services firm that was founded in Aberdeen, Scotland, and is now in the process of internationalizing its business with an emerging global center in the UAE.
