Chinese oil fields are aging, their reserves‐to‐production
ratios (R/P ratio) are low, and domestic oil production is nearing its peak. As
a result, the country is almost entirely dependent on the international oil market to meet incremental
oil demand. China became a net oil importer in 1993. For the past 17 years,
China has experienced strong economic growth, and recently became the
second‐largest economy in the world. Even during the recent financial and
economic crisis, China managed to achieve 8.7% GDP growth in 2009, and 10.3% in
2010. It requires a great amount of energy‐intensive raw materials and
infrastructure to satisfy China’s expanding consumer demand, as well as the
rest of the world’s demand for Chinese manufactured goods. This has stimulated
output from heavy industry, which also received a boost from China’s recent
stimulus spending on energy‐intensive infrastructure and buildings.
Most of China’s projected oil imports will continue to come
from a small number of countries. In 2009, the top ten crude oil suppliers to
China (in order of import volumes) were Saudi Arabia, Angola, Iran, Russia, Sudan, Oman, Iraq,
Kuwait, Libya and Kazakhstan. As many other net oil importers, especially in
Asia, China relies heavily on suppliers in the Middle East with 47% of its
total imports in 2009 originating from there . That high degree of
reliance is unlikely to change, even though China has been diversifying supply
to Africa, Central Asia, Latin America and Russia, where NOCs are seeking to
expand their upstream activities.
China’s gas market is one of the
fastest‐growing in the world, with a demand of 87.5 billion cubic meters (bcm)
in 2009. It is expected to reach 200 bcm by 2015. China's natural gas
production is reported to have reached 83 bcm in 2009. In the first half of
2010, China’s gas demand increased by 22% year‐on‐year, according to China’s
National Development and Reform Commission (NDRC). The rest of the demand was
satisfied through imports of LNG and the newly opened Central Asian pipeline
that will eventually bring around 40 bcm of gas5 from Turkmenistan and possibly
additional amounts from other countries. Reportedly, the draft Clean Energy Development
Plan being prepared by the National Energy Administration (NEA) calls for the
share of natural gas in China’s energy mix to rise sharply, from 4% currently
to 8.3 % by 2015. CNPC estimates that gas demand could reach 230 by 2015,
increasing to 250 bcm to 340 bcm by 2020. Even with vigorous exploitation of
domestic onshore and offshore resources, including unconventional gas, much of
the demand will be met by imports.
$72 billion Chinese acquisition in last 5 years has a interesting story to tell
Through acquisition Chinese have ensured they have assets supply to domestic markets as well as major international markets.
Large Chinese acquisitions in the past
|
Heading
|
Deal Value
($MM)
|
Country
|
Year
|
|
Sinopec
acquires Addax Petroleum for $8.5b
|
8,544.20
|
Nigeria
|
2009
|
|
Sinopec
acquires 40% interest in Repsol Brazil
|
7,109
|
Brazil
|
2010
|
|
BP sells 60% in Pan American Energy to Bridas
|
7,060
|
Argentina
|
2010
|
|
PetroChina
acquires 50% in Encana’s project
|
5,451.25
|
Canada
|
2011
|
|
ConocoPhillips
sells interest in Syncrude to Sinopec
|
4,650
|
Canada
|
2010
|
|
Shell and
PetroChina acquire Arrow Energy
|
3,448.11
|
Australia
|
2010
|
|
KMG and CNPC acquire Mangistaumunaigaz
|
3,300
|
Kazakhstan
|
2009
|
|
CNOOC forms
JV with Bridas Energy
|
3,100
|
Argentina
|
2010
|
|
Sinochem
acquires 40% in Statoil's Peregrino oil field
|
3,070
|
Brazil
|
2010
|
|
Cnooc & Total buy stake in Tullow's Ugandan assets
|
2,500
|
Uganda
|
2010
|
|
Sinopec
acquires interest in Angola Block 18
|
2,457
|
Angola
|
2010
|
|
Sinopec
acquires Argentina unit of Oxy
|
2,450
|
Argentina
|
2010
|
|
PetroChina
acquires Singapore Petroleum
|
2,241.27
|
Indonesia
|
2009
|
|
CNOOC and
Chesapeake form Eagle Ford JV
|
2,160
|
USA
|
2010
|
|
Sinopec
acquires Tanganyika Oil
|
1,997.20
|
Syria
|
2008
|
|
PetroChina
acquires 60% interest in oilsands
projects
|
1,741.50
|
Canada
|
2009
|
|
Chesapeake
and CNOOC form Niobrara JV
|
1,267
|
USA
|
2011
|
|
PetroChina
acquires Turkmenistan gas project
|
1,186.50
|
Turkmenistan
|
2009
|
