Archive for 3 Oil & Gas

China’s Petroleum Industry after Reshuffle: The Advent of A New Era

China’s petroleum industry has been restructured in accordance with the government’s institutional reform plan approved by the National People’s Congress in March 1998.The restructuring constitutes a substantial change in the management system of China’s petroleum industry since the country began the reform and opening process, and also a strategic reorganization of the industry’s assets.

3 Oil & Gas

Overseas Investments by Chinese National Oil Companies: Assessing the the Drivers and Impacts

This report examines inaccuracies in some commonly held views of China’s National Oil Companies (NOCs). Until now, there has been little analysis to test the widely held presumption that these companies act under the instructions and in close co-ordination with the Chinese government. Nor have critics been challenged on the validity of their concerns about investments made by these NOCs, and how they could be blocking supplies of oil for other importing countries. The IEA analysis, however, finds that contrary to these views, the NOCs actually operate with a high degree of independence from the Chinese government, and their investments have in fact largely boosted global supplies of oil and gas, which other importers rely on.

3 Oil & Gas, 3.2 Chinese Oil Companes

2011 Strategy Preview Analyst Briefing

3 Oil & Gas, 3.2 Chinese Oil Companes

Value Leading to Excellence, Annual Report 2010

Dear shareholders, With the year 2010 quietly slipping by, CNOOC Limited has reached another milestone in the course of its development with your care and support. In reporting the Company’s major operating results, I hereby would like to sum it up in two key expressions — “a new era of growth” and “changes in management team”. I will also share with you my thoughts on CNOOC Limited’s future development in another key expression — “value creation as top priority”

3 Oil & Gas, 3.2 Chinese Oil Companes

Sinopec Group Annual Report 2010

I would like to thank you for Following our development in the past year and look forward to your continued support and understanding. In the face of a complex business environment in 2010, under the strong leadership of the Chinese government and tremendous support from all aspects, we thoroughly implemented the scientific outlook on development, forged ahead pragmatically and progressively, and hit new highs in all aspects of our business performance amidst the extended crisis.

3 Oil & Gas, 3.2 Chinese Oil Companes

Sinopec Corporation Annual Report and Accounts 2010

Capitalizing on China’s steady economic growth, Sinopec Corp. achieved remarkable performance across all businesses and recorded a historical high in operational results despite a challenging operating environment. In 2010, we expanded our resources and markets, optimized operations and enhanced management. In Exploration & Production (“E&P”) business, we accelerated the implementation of our resource strategy, devoted greater efforts in exploration and development and realized continuous increase in reserves and production. Since the official launch of the Sichuan-East China Gas project, our natural gas business has achieved robust growth. In Refining business, we maintained high-load operation, upgraded oil products quality and met the increasing demands from the marketplace. Our Chemicals business took a faster pace to adjust product mix and develop new products and through introducing new capacities and reaping benefits from our centralized sales system, the segment recorded satisfying profit. In Marketing business, we further developed our business by entering new geographic areas, consolidating our existing networks and connections, and rapidly expanding the non-fuel business. We enhanced our ability in global sourcing to ensure crude supply and made a breakthrough in overseas oil and gas business. Our debt structure has also been optimized, thus improving the financial position and asset quality.

3 Oil & Gas, 3.2 Chinese Oil Companes

Development Journey and Outlook of Chinese Giant Oilfields

Over 70% of China’s domestic oil production is obtained from 9 giant oilfields. Understanding the behaviour of these fields is essential to both domestic oil production and future Chinese oil imports. This study utilizes decline curves and depletion rate analysis to create some future production outlooks for the Chinese giant oilfields. We can conclude that China’s future domestic oil production faces a significant challenge caused by maturing and declining giant fields. Evidence also indicates that the extensive use of water flooding and enhanced oil recovery methods may be masking increasing scarcity and may result in even steeper future decline rates than the ones currently being seen. The Chinese petroleum industry has managed to keep many of their giants on a production plateau for many decades. However, nothing can change the eventual onset of decline in oilfields and many of the Chinese giants have already passed their peak production levels. Our results suggest that a considerable drop in oil production from the Chinese giant oilfields can be expected over the next decades.

3 Oil & Gas, 3.3 Peak Oil

Forecast of Oil Reserves and Production in Daqing Oilfield of China

As China’s largest oilfield, Daqing is of great importance to China , this paper analyses the status of the Daqing oilfield and forecasts its ultimate recoverable reserves by use of the URR model. The forecast results are presented for three scenarios which show that the ultimate recoverable reserves in Daqing oilfield are 3574.0 million tons in the optimistic scenario, 3169.3 million in the base case scenario and 3033.3 million in the pessimistic scenario, respectively. A system dynamics model is established and the quantitative relationships between variables in the model are determined. Total oil production, remaining recoverable reserves, annual newly discovered reserves, and the degree of reserves recovery before 2060 are simulated under the three scenarios by use of the system dynamics model. The forecast results show that the future oil production in Daqing oilfield will continue declining, under the base case scenario, from 41.6 million tons in2007 to 8.0 million tons in2060. For Chinese policy makers, it is worth paying attention to the problem of whether oil production in new oilfields can effectively make up for the decline in production of the large, old oilfields.

3 Oil & Gas, 3.3 Peak Oil

The Evolution and Present Status of the Study on Peak Oil in China

Peak oil theory is a theory concerning long-term oil reserves and the rate of oil production. Peak oil refers to the maximum rate of the production of oil or gas in any area under consideration. Its inevitability is analyzed from three aspects. The factors that influence peak oil and their mechanisms are discussed. These include the amount of resources, the discovery maturity of resources, the depletion rate of reserves and the demand for oil. The advance in the study of peak oil in China is divided into three stages. The main characteristics, main researchers, forecast results and research methods are described in each stage. The progress of the study of peak oil in China is summarized and the present problems are analyzed. Finally three development trends of peak oil study in China are presented.

3 Oil & Gas, 3.3 Peak Oil

Drilling and Production, Peak Oil Models Forecast China’s Oil Supply, Demand

China’s oil production and demand is forecast using the Hubbert, Generalized Weng, and HCZ models. The Generalized Weng model best fits China’s oil production and forecasts a peak oil production of 194 tonnes/​year in 2026. The Hubbert model best fits China’s oil demand, which is expected to peak at 633 tonnes/​year in 2032. With a response from Jean Laherrere, 22 January 2008, Questions to Feng Lianyong on the OGJ 14 Jan.2008 article: “Peak oil models forecast China’s oil supply, demand”  

3 Oil & Gas, 3.3 Peak Oil