A Comparison of Investment Strategies of State Owned Chinese and Indian Oil Companies in Africa

　　ABSTRACT: Over the past several years, the high quality oil reserves boasted by the African continent have attracted a number of states which are net oil importers. The rising economies of China and India have recently joined the ranks of states developing oil resources in Africa, primarily through their state owned oil companies. The investment strategies of these two states in the oil industry in Africa have their respective advantages and disadvantages. Chinese companies have diversified their investments geographically across the African continent, have injected a large quantity of capital, and have a large scale of investment. Chinese companies also make policy decisions extremely quickly, maintain strong relations with governments and financial institutions, but are exposed to high levels of risk in their investment projects. India’s advantage is that its state owned oil companies follow operating models of private Western commercial companies, and pay closer attention to the relationship between risk and benefits when investing in projects. While so, state owned enterprises from the two countries face similar challenges in their investments strategies in Africa.