Development of oil and gas industry. People's Republic of China
Van Baodon, Chinese Petroleum Corporation of technologies development China Pan Chanvey, Research Center of global oil policy with China University of Petroleum, Institute of Development Research West China’s Zhejiang University China L. Ruban, Energy Research Institute of Russian Academy of Sciences
Today's China is one of the largest economies in the world. The country ranks first in energy use and is the second largest importer of oil after the United States. As Russian experts have already noted, Chinese companies are seeking to gain access to raw materials projects around the world - through long-term concessions, the purchase of shares in local companies, and loans guaranteed by the supply of raw materials.
Today`s China is one of the largest economies in the world. The country ranks first in terms of energy use and is the second largest oil importer after the United States. As already noted by the Russian experts, Chinese companies seeking access to resource projects around the world through long-term concessions, the purchase of the shares of local companies, loans under the guarantee of supply of raw materials.
According to the BP Statistical Review of World Energy, for the consumption of primary energy resources in million tons of oil equivalent. e. China, with an indicator of 2177, took 2nd place in 2009 after the United States - 2182. According to the IEA, in 2009 China became the largest consumer of energy resources in the world, for the first time ahead of the United States, which had been the leader in this indicator for more than 100 years.
In 1990 – 2002 Oil consumption in China increased by 91.5% (6.6% per year), incl. in its continental part - by 102% (more than 6.6% per year). In 2001, the volume of oil consumption in China amounted to 200 million tons, and since 2003, according to these indicators, the country has taken 2nd place after the United States, ahead of Japan. In 2004, consumption amounted to 308 million tons with a daily demand of 6.6 million barrels, that is, 8.3% of total oil consumption worldwide, with external dependence of 48%.
In 2009, China experienced a decrease in the rate of oil production compared to consumption volumes (by 2.2% in 2006 and by 3.1% to 189 million 489 thousand tons in 2009). There was also a decrease in the rate of oil consumption from 8% in 2006 to 6% in 2008 and 2009, and the growth of imports increased from 9.6% in 2008 to 13.9% in 2009.
In 2011, PetroChina became the largest oil producer in the world with production of 886.1 million barrels of oil per year or 2.428 million barrels per day. Dynamics of daily oil production and consumption for the period from 1998 to 2015. (according to the State Committee of the People's Republic of China) can be clearly seen from Table. 1.2.
Table 1. The ratio of oil production and consumption in China from 1998 to 2015.
Table 2. Production, consumption and import of oil in China, million tge, GDP dynamics (in%)
Source: National Bureau of Statistics of China. EIA
In 2013, the total apparent consumption (production + import-export) of primary energy increased by 3.7% and reached 3.75 billion tons of equivalent fuel - here (2.62 billion toe. 1.4286 here = 1 ton crude oil) with an increase of 3.7% (GDP grew by 7.7%). During the same period, coal consumption increased by 3.7%, oil by 3.4%, natural gas by 13%, and electricity by 7.5%.
In 2013, China's own production of primary energy resources amounted to 3.4 billion tons with an increase of 2.4%, of which coal production amounted to 3.68 billion tons with an increase of 0.8%; oil production – 209 million tons (+1.8%); natural gas production – 117.05 billion m 3 (+9.4%), and electricity production amounted to 5397.59 billion GW (+7.5%). For 1980 – 2013 The demand for primary energy resources in the Chinese economy increased by 6.72 times, including coal by 6.25 times, oil by 6.14 times, and natural gas by 12.14 times. Data on the structure of consumption of primary energy resources in China from 1980 to 2014. are given in table. 3, 4.
Table 3. Structure of consumption of primary energy resources in China (million toe/Mtoe)
Source: “BP Statistical Review of World Energy 2013” and calculations by Pan Ch. based on the database of published data from the PRC statistical agency
Table 4. Structure of consumption of primary energy resources in China (in%)
According to Russian experts, oil production in China will drop to 150–170 million tons by 2020, as Beijing will reduce production at its own fields and maximize import volumes while increasing its oil refining capacity (by 2015 they should be 11 million barrels/day).
China, which ranks second in the world in oil consumption, increases its refining volumes from year to year. In October 2009, refineries processed 33.29 million tons of oil, beating the previous record of 33.11 million tons set in July 2009. According to Platts, this increase in oil processing volume in October 2009 coincided with an increase in oil imports by 12.3% compared to September 2009 and a reduction in imports of petroleum products by 11.6%. Oil imports in October 2009 amounted to 19.33 million tons - 19.6% more than in the same period in 2008. According to the Platts report, throughout China's history, monthly oil imports were higher than in October 2009, just once. For comparison, in 2008, oil refining capacity was: in China - 350 million tons per year, Japan - 277, South Korea - 132, India - 150 million tons.
In 2009, CNPC launched a new refinery with a capacity of 200 thousand barrels per day in the Dushanzi region in the west of the Xinjiang Uyghur Autonomous Region, and a division of the British-Dutch oil company Royal Dutch Shell - Shell Lubricants - a refinery in Zhuhai (Guangdong Province) with a capacity of 200 million l/year. This complex became Shell's sixth plant in China. In 2011, according to Sinopec estimates, the total capacity of the refinery was 501 million tons per year - tvg, and by the end of the 12th Five-Year Plan, in 2015, this figure is planned to increase by 50% - to 750 million tg.
Since resource availability is one of the most important factors in economic development, let us trace the dynamics of our own hydrocarbon reserves. On a per capita basis, China's availability of recoverable reserves was as follows:
- in 2000 - 2.6 tons of oil, natural gas - 1074 m 3, coal - 90 tons, which corresponded to 11.1%, 4.3% and 55.4% of the world average;
- in 2002, China's own oil and natural gas reserves, according to World Bank estimates, amounted to 2.4 and 1.2% of global resources, respectively;
- in 2004, according to Deputy Minister of Land and Natural Resources of the People's Republic of China Shu Jiahua, proven oil and gas reserves in China reached 40.4 billion tons of oil equivalent. e., of which 24.5 billion tons were in coastal waters; that year, China was self-sufficient in energy resources by 94%, external dependence was 6%, but coal accounted for 2/3 of the country’s energy consumption structure.
As part of the development of national energy in China, a significant increase in the share of natural gas in the country's fuel and energy balance is envisaged. Significant investments in geological exploration allowed the PRC to increase its proven natural gas reserves from 1.199 trillion m3 in 1998 to 3.3 trillion m3 in 2013 (Table 5). This is facilitated by the presence of relatively large natural gas reserves in China.
Table 5. Dynamics of growth of proven gas reserves in China
At the same time, China is actively importing hydrocarbons. Beijing already became a net importer of oil in 1993, and in 2009, China for the first time imported more oil than it produced from its own fields. In 2010, the volume of imported oil exceeded 239 million tons for the first time. Experts predict that in 40 years the country will be able to independently provide only 3% of domestic oil demand.
In 2010, the country's dependence on external supplies of natural gas was 15%, and oil - exceeded 55%, although China also supplies a small amount of oil to Japan.
In the first half of 2011, China's dependence on oil imports was already 55.3%. Scientists believe that in 2015 this figure will reach 60%, and in 2020 – 65%; in 2030 it could approach 75%. That is, the provision of energy resources is becoming not only a fundamental factor in the accelerated development of the PRC economy, but also a subject of ensuring national security.
China currently has oil and gas supply agreements with a number of African countries, as well as Iraq, Costa Rica and Australia. Baghdad intends to supply Beijing with up to 5.7 million tons of oil per year for 23 years or more. Canberra – up to 2 million tons of LNG per year for 20 years. At the end of 2012, Australia was in second place after Qatar in terms of liquefied gas supplies to China. Petrochina (a subsidiary of CNPC) bought BHP in one of the Australian gas liquefaction projects worth $1.7 billion. Chinese CNOOC invested another $2 billion in LNG production in eastern Australia (Queensland LNG). In addition, China purchases coal, iron ore, and non-ferrous metals from Australia.
Significant efforts of the Chinese leadership are aimed at developing fuel and energy cooperation with Qatar in the field of gas supplies (Qatar has 1st place in LNG supplies to China), and with Venezuela, Brazil and Kazakhstan - oil. At the end of 2012, CNOOC bought Canada's Nexen. This was the first major purchase of a Western company that China had managed to make; In addition, Nexen's assets are located not only in Canada, but also beyond its borders: in the North Sea, the Gulf of Mexico and other regions.
Saudi Arabia remains China's largest trading partner. However, China is actively diversifying its oil supplies to ensure its energy security. In 2009, China signed more than 130 agreements on cooperation in the energy field and the provision of related services with 43 countries and regions of the world for a total investment of over $60 billion. In 2010, the Chinese-Russian oil pipeline was successfully launched in the northeast (branch to Daqing), the China-Kazakhstan gas pipeline and the China-Central Asia gas pipeline (TUCC) in the northwest, as well as the China-Myanmar oil and gas pipeline in the southwest of China. Dependence on oil imports (over 50% of oil needs) weakens the energy security of the People's Republic of China.
If we take a short historical excursion, it should be noted that an acute situation arose in China already in the second half of 2003. In many provinces and large cities, there were interruptions in the supply of gas stations with gasoline and diesel fuel, which prompted the government to increase prices for petroleum products. At the end of 2003, tariffs for domestic air travel were raised. Due to a lack of electricity, rolling blackouts began in 22 provinces, autonomous regions and municipalities, leading to large economic losses and partial shutdown of production lines at a number of large industrial and mining enterprises.
Already in 2004, the deficit of installed capacity in the electric power industry amounted to 20 million kW (in 2003 – 10 million kW). In 2004, due to oil shortages, a third of Chinese enterprises were operating at less than full capacity. In 2005, the oil deficit in China amounted to 50–60 million tons. As noted in 2010 by the scientific director of the Institute of Geology and Mineralogy of the SB RAS, Academician N.L. Dobretsov, China is experiencing a constant shortage of energy resources, industrial enterprises work at night, but this does not help, even during the day they have to carry out rolling blackouts for 3–4 hours. In this regard, Chinese businessmen and the government are very interested in obtaining energy resources from Russian territory, since China is able to cover only 1/3 of its needs with its own resources.
As experts noted, high rates of economic development, deepening processes of industrialization and urbanization, increasing volumes of industrial and domestic use of electricity, growing number of cars, expanding demand for oil and gas determined not only the capacity of the Chinese energy consumption market, but also exacerbated the problems associated with providing Chinese of the People's Republic with energy resources, have raised the issue of providing the needs of the country's population and its economy with energy resources at the present time and in the near future. The question of energy saving arose.
And this task is being successfully solved in China. Half of the country's economic growth is ensured by energy conservation. Thus, after quadrupling its GDP in 20 years, China only doubled its energy consumption. Along with India and South Africa, China is a country in which coal is dominant in its fuel and energy balance. According to the program of the State Council of the People's Republic of China, by 2020 the share of useful non-fossil fuels in the structure of consumption of primary fuel and energy resources should be 15%, the share of coal will decrease to 55%, oil will be 23%, and gas – 10%. One of the main problems associated with the use of coal as a fuel is the enormous damage it causes to the environment and public health. Coal combustion products are the main source of air pollution in China due to sulfur dioxide, which causes acid rain, and the release of carbon dioxide into the atmosphere leads to the greenhouse effect. It is these circumstances that prompt the developers of China’s energy strategy to strive to reduce the share of coal in the country’s fuel and energy balance.
Some statistics
According to Chinese experts, China's own oil reserves will last for 40 years, natural gas for 65 years, and coal for 250-300 years. Coal accounts for 68.7% of the country's energy consumption. (In the world, only in India and South Africa is coal also the dominant fuel.) According to the 10th Five-Year Plan (2001–2005), 70% of the demand for primary energy resources was met by coal. In 2009, China was the leader in its production (up to 45.6% of the world).
Despite the fact that coal occupies a leading position in Chinese energy, oil and gas consumption in China continues to grow. In 2009, oil and natural gas accounted for 21.4% of China's energy consumption structure. The share of coal is projected to decrease by 9% over the next 10 years, while the share of oil and natural gas will increase by 7%. In this regard, Chinese experts believe that one of the ways to solve the problem of oil shortage is a strategy aimed at oil substitution, focusing on the rational development and use of high-quality domestic coal, natural gas, nuclear energy and hydro resources. Serious attention is also paid to the development of renewable energy sources: wind, sea and sun. In addition, according to preliminary estimates, the volume of shale gas deposits in China is about 30–100 trillion m3.
Natural gas historically played a minor role in China's energy balance until the mid-1990s. was used mainly for the production of mineral fertilizers, and about 10% was used for domestic needs and maintenance of small power plants. So, first of all, gas will be needed for the production of electricity (thermal power plants are stable and solvent consumers) and domestic needs, where natural gas is replacing coal. The complexity of this transition is due to the fact that the transition to gas in the domestic and industrial sectors is twice as expensive as in the electricity sector. The gas market in the country is in its infancy, and demand has to be created artificially through appropriate policies and government incentives.
China's gas industry is still in its early stages of development. According to Chinese sources, in 2009 the share of natural gas in the country's energy consumption structure was only 3.4% (according to BP - 4%), at the end of 2010 it remained at 4%.
In 2008, gas consumption in China amounted to 72.40 billion m 3, of which almost a quarter was for the needs of the oil and gas industry. In 2009, gas consumption reached 87.45 billion m 3 with an increase of 11.5%, and in 2010 – 107.2 billion m 3. Total natural gas consumption in 2011 reached 130.6 billion m3. According to the State Plan for the 12th Five-Year Plan (2011 - 2015), the share of natural gas in the balance of energy consumption should increase and reach 8% - 8.3% in 2015.
Demand for gas in China increases annually by more than 10%, and over the past 10 years its consumption has increased 3.5 times. In the next 5 years, this demand will double, and according to the forecast of the Institute of Energy Resources of the State Committee for Development and Reform of the People's Republic of China, the volume of consumption in 2020 could reach 250 billion m3 and the People's Republic of China will become third in the world in terms of gas consumption by 2020.
In 2010, pipeline gas imports to China amounted to 11.86 billion m3, and in 2011 - 14.5 billion m3, gas exports from China amounted to 3.2 billion m3.
China ranks 22nd in the world in natural gas production. In 2001, more than 27.86 billion m3 was produced, in 2005 – 47.88 billion m3, in 2008 – 75.80 billion m3, in 2009 – 83 billion m3, and in 2011 – 102.5 billion m3. Natural gas production in China has been growing at a rate of 15% over the past 10 years, that is, more dynamically than oil production (an increase of 2%). According to forecasts, by 2015 the volume of natural gas production in China will be 170 billion m3, by 2030 - 300 billion m3, and the volume of its imports will be 400 - 500 billion m3 by 2030.
The LNG market is developing. In 2011, its imports to China amounted to 12.2 million tons (16.86 billion m 3). In general, to date, Chinese companies have concluded 12 long- and medium-term contracts for the supply of LNG, the import volume of which amounts to 28.5 million tons (about 40 billion m 3) per year, as well as a number of long-term contracts for the supply of pipeline gas (PNG) to volume of 44 billion m 3 per year and framework agreements ensuring the supply of 83 - 88 billion m 3 of TPG per year.
Half of China's economic growth was driven by energy conservation. After quadrupling its GDP in 20 years, China has only doubled its energy consumption.
At the end of 2011, the total annual capacity of Chinese terminals for receiving and regasification of LNG reached 18 million tons, although in 2012 China imported only 15 million tons, but in the coming years this figure, according to experts, will double and even triple, and in at the end of the five-year period will reach 30 million tons, which will cover all the country’s LNG needs until 2020. China plans to increase LNG regasification capacity 70 times over the next 20 years - from 1 billion m 3 in 2008 to 70 billion m 3 by 2030 . .
Regarding shale gas and the prospects for its development, CNPC estimates Chinese shale gas resources at 36.81 trillion m3 (below 2000 m, recoverable resources at 10.87 trillion m3, proven reserves at 102.308 billion m3) and plans to develop their production in the amount of 500 million m 3, and by 2020 – 15–30 billion m 3, noting that by 2030 shale gases will account for 25% of China’s gas production. According to statements by the China National Energy Agency, by 2015 China will produce 6.5 billion m3 of shale gas, and in 2020 – 60–100 billion m3.
In March 2012, CNPC signed a PSA with Shell to jointly develop the Fushun-Yongchuan field in Sichuan province in the southwest of the country. Previously, foreign companies could only take part in exploration and experimental drilling of wells. In addition to Shell, BP, Chevron and Total are also searching for shale gas in China.
The PRC is concerned about the problem of energy security because it affects not only the economy, but also political, military and diplomatic relations. Experts identify the following main threats and challenges to China’s energy security:
- the growing disproportion between demand and oil production, leading to China's threatening external dependence on import supplies;
- the lack of diversification of most energy imports from the unstable Middle East (over the decade, these purchases increased by almost 10%: in 1999 - 46.2%, in 2009 - 56%), which puts China’s strategic interests in dangerous dependence on the situation in this region;
- fluctuations in world prices as a destabilizing factor;
- the growth of military spending and the strengthening of the power of Japan, South Korea, Vietnam, the Philippines, India and the need for the Chinese Navy to ensure the security of sea transit of oil and gas;
- the emergence of regional conflicts near transport routes for the import of hydrocarbon raw materials to China.
China, which ranks second in the world in oil consumption, increases its refining volumes from year to year.
Experts believe that to ensure oil, state and economic security, China needs to create 90-day oil insurance reserves.
Since 75% of China's oil imports come from the turbulent Middle East and Africa and are transported along the Strait of Hormuz - Indian Ocean - Strait of Mallaka route, which runs along the line of military conflicts, CNPC, in order to increase the level of supply security and reduce the transport distance by 1200 km, carried out construction of a number of facilities for receiving and pumping imported oil through neighboring Myanmar to the border with China.
Some statistics
The history of the state oil reserve in the PRC began in 2003. During the 10th Five-Year Plan (2001 - 2005), it was decided to create facilities for storing strategic oil reserves, for which the construction of oil storage facilities began in 2004, and at the beginning of 2009 d. implementation of the first phase of the project was completed. As a result, four storage facilities were put into operation in coastal provinces with a total capacity of 13.7 million tons.
In 2005, in the event of a cessation of import supplies, strategic reserves would have been enough to operate the country’s enterprises for 30 days (in accordance with the 10th five-year plan), and in 2010 - for 50 days - about 15 million tons (Western countries have strategic stocks for 120 – 160 days).
In 2012 – 2013 – the second phase of the project – 8 oil storage facilities with a total capacity of up to 36 million tons. Two storage facilities were already built in 2011, two in 2012, and the remaining 4 in 2014.
In 2016, by the end of the third phase, the project is planned to be completed: by this time, the total storage capacity will be about 67 million tons. In addition to these capacities, the country already has commercial storage facilities with a capacity of more than 40 million tons of oil.
As Chinese experts note, the PRC entered the struggle for global oil and gas resources late and therefore lost to Western countries at the initial stage. Now he is catching up, given the fact that there is fierce competition in the international energy market and mainly in three regions: the Middle East - North Africa, the Middle East - Russia and the South China Sea zone. The PRC seeks to ensure its interests by acquiring concessions for oil development abroad or for joint participation in production on the territory of foreign countries (for example, concessions in Kazakhstan, Venezuela, Sudan, Peru, Iraq, Azerbaijan). China is interested in oil from Central Asia and Russia.
Our raw material resources are geographically close to China, so China in the long term is interested in expanding cooperation with Russia in the energy sector. Today it is more obvious than ever that this cooperation has considerable prospects.
The negotiation process on supplies of Russian oil and gas is actively underway. In June 2013, Rosneft and the China National Petroleum Corporation (CNPC), during the St. Petersburg Economic Forum, signed a long-term contract for the supply of Russian oil in the amount of 365 million tons over 25 years. The estimated volume of the transaction was $270 billion. The contract provided for the supply of 325 million tons of oil via a branch of the Eastern Siberia - Pacific Ocean (ESPO) Skovorodino - Mohe oil pipeline. In addition, 35 million tons of oil will be supplied to the Tianjin Oil Refinery via the same route.
In 2014, due to economic sanctions of the European Union, the Russian Federation began to more actively pursue an eastern gas policy.
In May 2014 in Shanghai, Chairman of the Board of OJSC Gazprom A.B. Miller and President of the China National Petroleum Corporation Zhou Jiping in the presence of Russian President V.V. Putin and Chinese President Xi Jinping signed a contract for the supply of Russian pipeline gas to China via the “eastern” route.
The contract for a period of 30 years provides for the export of 38 billion m 3 of Russian gas per year to China on mutually beneficial terms linked to the oil basket and the “take or pay” condition. This is the largest gas supply contract in the entire history of Gazprom, under which more than 1 trillion m3 will be shipped during the validity of the agreement. The Power of Siberia main gas pipeline is being built specifically for this project, which began construction in September 2014, and is scheduled to launch in 2018–2020. with gas injection from Chayanda and Kovykta. A large-scale gas infrastructure will be created in the East of Russia, which will become the engine for the development of the region’s economy. Entire sectors of the Russian economy will receive a powerful stimulus for development: metallurgy, pipe industry, mechanical engineering. For the Russian gas industry, this agreement with China not only opens up a new promising supply route, but also diversifies traditional supply routes in order to hedge risks and increase the stability of the global player in the gas market.
At the beginning of October 2014, the issue of gas supplies to China was discussed, and a new agreement was signed.
On November 9, 2014, in Beijing, the Russian and Chinese parties concluded a number of agreements in the fuel and energy sector, including a memorandum between Gazprom and CNPC on the supply of 30 billion m 3 of gas along the western Altai route for 30 years. The document reflects the timing and volume of fuel transportation, the point of its transfer at the border and the “take or pay” condition. The document defines the conditions for transporting fuel from fields in Western Siberia. The agreement could be signed as early as this year, and gas exports to China, it is possible, will exceed the volume of its sales to Europe. Supplies via the Altai gas pipeline will be carried out from the same fields, the resources of which are used to sell raw materials to European countries and, possibly, will further exceed current exports to Europe.
As Sberbank CIB analysts note, the eastern route is of priority importance for Beijing, especially important for the northeastern regions with poor ecology due to the use of coal. However, on the western Chinese border, Russian gas faces great competition, since supplies are already being made via the Kazakh-Turkmen-Uzbek gas pipeline TUKK, but, as analysts emphasize, China is relying on diversification.
Among other documents, on November 9, 2014, a memorandum of understanding was signed in Beijing between Gazprom and CNOOC (confidential), as well as framework agreements between Rosneft and CNOOC on the Chinese purchase of more than 10% in Vankorneft. In addition, on November 10, 2014, Russia and China agreed on an additional supply of oil in the amount of 5 million tons. This was stated by the head of Rosneft I.I. Sechin in an interview with the Rossiya 24 TV channel:
“We have agreed on an additional oil supply point, and now, in addition to Skovorodino, where, as you know, the line to Mohe-Daqing starts, we will be able to supply additional volumes via another route, 5 million tons each, for the period while the pipelines for the Chinese side are being expanded. So this is a very good result. The dynamics of our work are very high, the dynamics of contacts are very high, and I believe that we did everything we could do.” .
Literature
10
- Stocks: 13,986 million barrels
- Production: 2,624 thousand bar/day
Despite its 10th place on our list, Brazil only meets half of its oil needs and is forced to import it. The annual demand for oil is 75 million tons. Brazil's main manufacturing industries are petroleum refining and chemicals. The manufacturing industry accounts for over a quarter of GDP.
9
- Stocks: 104,000 million barrels
- Production: 3,000 thousand bar/day
Kuwait is one of the important oil exporters and is a member of OPEC. On June 19, 1961, Kuwait became an independent state. The code of laws was compiled by an Egyptian lawyer invited by the emir. In the 1970s-1980s, thanks to oil exports, Kuwait became one of the richest countries in the world; the standard of living in this country was one of the highest in the world. According to Kuwait's own estimates, it has large oil reserves - about 104 billion barrels, that is, 6% of the world's oil reserves. Oil provides Kuwait with about 50% of GDP, 95% of export revenues and 95% of government budget revenue. In 2014, Kuwait's GDP was about $172.35 billion, per capita - $43,103.
8 United Arab Emirates
- Stocks: 97,800 million barrels
- Production: 3,188 thousand bar/day
On December 1, 1971, six of the seven emirates of Trucial Oman announced the creation of a federation called the United Arab Emirates. The seventh emirate, Ras al-Khaimah, joined in 1972. The granting of independence coincided with a sharp rise in prices for oil and petroleum products caused by Saudi Arabia's tough energy policy, which made it easier for the new state to take independent steps in the field of economics and foreign policy. Thanks to oil revenues and skillful investment in the development of industry, agriculture, and the formation of numerous free economic zones, the Emirates were able to achieve relative economic prosperity in the shortest possible time. The spheres of tourism and finance have received significant development.
Most of the production takes place in the emirate of Abu Dhabi. Other oil producers in order of importance: Dubai, Sharjah and Ras Al Khaimah.
Recently, the share of revenues from oil production and refining in total GDP has been declining, which is due to government measures to diversify the economy.
7
- Stocks: 173,625-175,200 million barrels
- Production: 3,652 thousand bar/day
Canada is one of the richest countries in the world with a high per capita income and is a member of the Organization for Economic Co-operation and Development (OECD) and the G7. However, due to the very low population density, some countries are classified as developing countries. Canada is the world's largest producer of uranium and is among the largest producers of hydroelectricity, oil, natural gas and coal. In the early 2010s, the majority of Canada's oil is produced in the western provinces of Alberta (68.8%) and Saskatchewan (16.1%). The country has 19 refineries, 16 of which produce a full range of petroleum products.
6
- Stocks: 157,300 million barrels
- Production: 3,920 thousand bar/day
Iran is located in a strategically important region of Eurasia and has large reserves of oil and natural gas, and is an industrial country with a developed oil industry. There are oil refining and petrochemical enterprises. Extraction of oil, coal, gas, copper, iron, manganese and lead-zinc ores. According to the Iranian constitution, the sale of shares in national oil production enterprises or the granting of oil concessions to foreign companies is prohibited. The development of oil fields is carried out by the state-owned Iranian National Oil Company (INNK). Since the late 1990s, however, foreign investors have come to the oil industry (French Total and Elf Aquitaine, Malaysian Petronas, Italian Eni, China National Oil Company, as well as Belarusian Belneftekhim), who, under compensation contracts, receive part of the oil produced, and upon expiration of the contract, the fields are transferred to the control of INNK.
Despite its enormous hydrocarbon reserves, Iran is experiencing a shortage of electricity. Imports of electricity exceed exports by 500 million kilowatt-hours.
5
- Stocks: 25,585 million barrels
- Production: 3,938 thousand bar/day
Oil is an important source of energy resources for China. In terms of oil reserves, China stands out significantly among the countries of Central, East and Southeast Asia. Oil deposits have been discovered in various areas, but they are most significant in Northeast China (Sungari-Nonni Plain), coastal areas and the shelf of Northern China, as well as in some inland areas - the Dzungarian Basin, Sichuan.
The first oil was produced in China in 1949; Since 1960, the development of the Daqing field began. The year 1993 was a turning point for Chinese energy, marking the end of the era of self-sufficiency. China experienced an oil shortage for the first time since 1965. Until 1965, the PRC also experienced a shortage of this type of fuel, importing it from the USSR. However, after the development of large fields in Daqing, China was able to provide oil not only for itself, but also for its neighbors by the early 70s. Subsequently, a number of other deposits were also discovered in the east of the country. Oil exports were also one of the main sources of foreign exchange. Since the beginning of the 1980s, due to a lack of investment in the oil industry, the depletion of old fields and the lack of new ones, the growth rate of oil production has begun to fall. The consequences of the ineffective implementation of the self-sufficiency strategy were manifested in the fact that China, which was not affected by the “oil shocks” of 1973 and 1978, did not, like Western countries, develop energy-saving technologies and focus on problems of energy security, including efficient production while causing minimal harm to the environment. Nevertheless, oil exploration in China was very active - from 1997 to 2006. 230 deposits have been discovered. Proven oil reserves in China at the beginning of 2006 amounted to 18.3 billion barrels. By 2025, this figure will increase by another 19.6 billion barrels. At the same time, undiscovered reserves amount to 14.6 billion barrels.
4
- Stocks: 140,300 million barrels
- Production: 4,415 thousand bar/day
Iraq's main mineral resources are oil and gas, the deposits of which stretch from the northwest to the southeast of the country along the Mesopotamian foredeep and belong to the oil and gas basin of the Persian Gulf. The main branch of the economy is oil production.
Iraqi state-owned companies North Oil Company (NOC) and South Oil Company (SOC) have a monopoly on the development of local oil fields. They report to the Ministry of Oil. Iraq's southern fields, managed by SOC, produce about 1.8 million barrels of oil per day, accounting for almost 90% of all oil produced in Iraq. Iraq's income from oil exports since the beginning of 2009, as of August 1, 2009, amounted to $20 billion. On August 10, 2009, this was announced by the Director General of the Marketing Department at the Ministry of Oil, Jassem al-Mari. Iraq has the world's third-largest proven hydrocarbon reserves. Their exports provide about 98 percent of income to the country's state budget.
3 United States of America
- Stocks: 36,420 million barrels
- Production: 8,744 thousand bar/day
Oil is a key source of energy for the United States. Currently, it provides about 40% of total energy demand. The United States Department of Energy has a mineral energy resource management division that is responsible for critical issues related to oil - preparedness to respond to supply disruptions and maintaining the operation of American fields. In case the United States faces production problems or interruptions in oil supplies, there is a so-called strategic petroleum reserve created after the oil crisis of 1973-1974, which currently stands at approximately 727 million barrels of oil. Currently, the strategic oil reserve supplies enough for 90 days.
The leaders in oil production are Texas, Alaska (Northern Slope), California (San Joaquin River basin), as well as the continental shelf of the Gulf of Mexico. However, oil production from the remaining fields in the United States is becoming increasingly more expensive because most of the inexpensive, readily available oil has already been produced. According to statistics, for every barrel produced in American fields, 2 barrels remain in the ground. These data indicate that it is necessary to develop technologies in drilling, oil production, as well as the search and development of new fields. The use of oil shale and sands and the production of synthetic oil could significantly increase American oil reserves.
2
- Stocks: 80,000 million barrels
- Production: 10,254 thousand bar/day
The Russian Federation ranks eighth in terms of oil reserves. Oil reserves are estimated at 80,000 million barrels. Most of these resources are concentrated in the eastern and northern regions of the country, as well as on the shelves of the Arctic and Far Eastern seas. At the beginning of the 21st century, less than half of the 2,152 oil fields discovered in Russia were involved in development, and the reserves of exploited fields were depleted by an average of 45%. However, the initial potential of Russia's oil resources has been realized by about a third, and in the eastern regions and on the Russian shelf - by no more than 10%, so it is possible to discover new large reserves of liquid hydrocarbons, including in Western Siberia.
1
- Stocks: 268,350 million barrels
- Production: 10,625 thousand bar/day
In March 1938, colossal oil fields were discovered in Saudi Arabia. Due to the outbreak of World War II, their development began only in 1946, and by 1949 the country already had a well-established oil industry. Oil became the source of wealth and prosperity for the state. Today, Saudi Arabia, with its enormous oil reserves, is the main state of the Organization of Petroleum Exporting Countries. Oil exports account for 95% of exports and 75% of the country's income, helping to support the welfare state. The Saudi Arabian economy is based on the oil industry, which accounts for 45% of the country's gross domestic product. Proven oil reserves amount to 260 billion barrels (24% of proven oil reserves on Earth). Saudi Arabia plays a key role as a “stabilizing producer” in the Organization of the Petroleum Exporting Countries, through which it regulates global oil prices.
MOSCOW, October 4 — PRIME, Anna Podlinova. The trade conflict with the United States forced China to refuse to buy American oil. According to China Merchants Energy Shipping (CMES) President Xie Chunlin, Chinese importers stopped purchasing raw materials in September.
Oil supplies from the United States to China account for only 2% of total imports, so China can easily find a replacement for American raw materials, say analysts interviewed by the Prime agency. In addition, over the past few months, China has been increasing oil reserves and systematically reducing imports from the United States.
Iran may become a new supplier for China. It is possible that he will offer discounts to Chinese consumers in exchange for large quantities of imports. Overall, neither the US nor China would suffer much from this measure, but it does put global commodity markets at risk.
THERE ARE NO ESSENTIALS
It will not be a big problem for China to replace oil imports from the United States with supplies from other countries, and in addition, China has been increasing its oil reserves in recent years, says Ekaterina Grushevenko, an expert at the Energy Center of the Moscow School of Management Skolkovo. “The share of oil supplies to China from the United States is small - about 2%. Therefore, it will not be difficult to replace this volume with the help of Iran. We should not forget about the oil reserves that China has been increasing in recent years,” she notes.
According to her, the situation will not provoke a shortage in the market, but it may temporarily complicate the work of refineries that relied on this oil.
Novak: Russia will continue the oil-for-goods program with Iran, despite US sanctions
Perhaps Chinese importers are now reorienting themselves to Iranian oil as much as possible, agrees Alexey Kokin, senior oil and gas analyst at Uralsib. “It is difficult to say what role the risk of China introducing import duties on US oil played in this and whether there were direct instructions from the authorities to abandon American imports. One way or another, China will apparently become the main buyer of Iranian oil from November, since all other importers are Japan, Korea, India, large European companies are likely to stop all purchases,” he says.
It is possible that Iran will offer discounts to Chinese companies in exchange for the maximum possible volumes of oil and condensate imports, Kokin believes, adding that in such a situation, Chinese importers may well refuse supplies from the United States. At the same time, American oil may go to markets where Iranian oil will no longer be supplied, the analyst says.
Oil exports from the United States to China are indeed small and amount to about 9.7 million barrels per month, says Anna Kokoreva, deputy director of the analytical department of Alpari.
“It will not be difficult for China to replace these volumes, and in the structure of US exports, supplies to China account for only a sixth,” she notes.
The volume of oil supplies to China from the United States has been declining for several months in a row. “For the most vigilant, the message about the cessation of supplies did not come as a surprise,” she said.
According to the chief analyst of BCS Premier Anton Pokatovich, the US export position in the world market is still relatively weak, despite the active growth in production and exports during 2017-2018. US crude oil exports to China at the end of July amounted to about 380 thousand barrels per day, or 18.3% of the total volume of US crude oil exports. At the same time, the United States accounts for only 3% of China's oil imports.
“These supply volumes for China will be able to be reimbursed by OPEC+ member countries; in this case, the Russian Federation will have another chance to further strengthen its export positions in the Asian region,” he does not rule out. In turn, American oil supply may find buyers among countries that will refuse Iranian oil under the threat of American sanctions.
WHO WILL WIN
Chinese importers were worried that a potential increase in customs duties on US oil could lead to higher oil import costs, says Liu Qian, deputy head of the standing committee of the Russia and Central Asia Research Center at China Petroleum University (Beijing). reduce imports of American oil," he said.
Novak: Russia has not reached peak oil production, but is capable of increasing it
According to him, stopping purchases of American oil will not create problems for China; it can compensate for this by increasing supplies from Russia, Iran and other countries. This year, Russia has almost doubled its oil supplies to China via pipeline compared to last year, he recalled.
The very fact of further aggravation of relations between the two countries, which is reflected in commodity markets, is negative, says Kokoreva.
“It is not yet known how Beijing will respond to Washington’s actions; there is no certainty that the PRC will take any action at all,” she argues.
This situation has a more negative impact on the United States than on China, Pokatovich believes. “The systematic nullification of trade relations between the two powers as part of a conflict of trade interests was sooner or later bound to affect oil supplies,” he believes. In his assessment, the US actions in this case are once again in the nature of harsh trade pressure.
The trade war between China and the United States began after mutual increased customs duties between the states came into force on July 6 this year. The United States has imposed a 25% tariff on the import of 818 items from China with a total supply of $34 billion per year. As a countermeasure, China on the same day imposed a 25% tariff on imports of an equivalent volume of American goods.
At the end of September, new US tariffs of 10% on $200 billion worth of imports from China took effect each year. China responded by imposing tariffs of 10% and 5% on $60 billion of American imports. However, oil is not subject to these duties.
Many people know that China is the country that introduced gunpowder, earthenware, compass, silk and paper to the world. Now this information has become something commonplace and not surprising. But these inventions are not everything. If we talk about the oil and gas industry, then here too China had advanced technologies.
How they did it in China
In ancient times, even before our era, China had already mastered oil and gas production by drilling wells. The invention of the percussion-rope drilling method belongs to the Chinese builder Li Bing, who erected a dam on the Minjian River in 250 BC. Initially, this was how a brine solution was obtained, and later they began to use it to extract oil and gas from the depths.
To obtain oil, a well was first dug. A wooden pipe was inserted into it, covered with stones on top - one or more, but so that a small hole remained. Next, a metal weight weighing about two hundred kilograms (the so-called “baba”) was lowered into the pipe. The weight was attached to a rope made of reed and served as a drill. By the force of people or animals, he was lifted and dropped into the well again, destroying the rock with the force of the impact. From time to time, the “baba” was pulled out, the contents of the well were scooped out, and the accumulations of water were pumped out with a kind of pump from a bamboo pipe with a valve. Using this method, the Chinese drilled a well about 60 cm per day. Deep wells have been developed for more than one year.
As for natural gas, the Chinese nation is considered the first to open the wide possibilities of its use to the world. Already in the 2nd century BC. Gas production by drilling was carried out systematically. The Chinese have invented the world's first bamboo pipeline to transport gas from the fields. And, what’s even more amazing, they learned to control its combustion. For this purpose, a complex structure was invented from wooden cone-shaped chambers. The largest of them was dug into the ground to a depth of three meters - gas was supplied into it from a well. Pipes ran from the large chamber to several smaller chambers installed above the ground. Holes were made in small chambers to supply air and mix it with gas. Thus, workers could constantly adjust the composition of the gas-air mixture and avoid explosions. Excess gas was directed into pipes that looked upward.
It is known that in ancient times gas production was carried out in the provinces of Sichuan, Shaanxi and Yunnan. Needless to say, the Chinese people put a lot of effort into protecting their technology. Indeed, in all other parts of the world, oil was still extracted using primitive methods - collecting, manually digging wells and pits. And natural gas was considered something otherworldly or divine and was mainly an object of worship and awe for people.
Areas of application
During the Song Dynasty (960 to 1270 AD), oil was used in portable bamboo pipes that were used as torches at night. Although oil was used to illuminate homes in China, it was not widely used, perhaps because of its unpleasant odor. However, the Chinese used clay pots with reed wicks impregnated with oil.
The great Chinese scientist Shen Kuo called oil “rock oil” and noted that its reserves in the country are huge and this can have an impact on the whole world. The prediction turned out to be as accurate as possible. In 1080–1081 Shen Kuo used the soot produced by burning oil to make ink for painting and calligraphy. His method became a replacement for the production of carcasses from burning pine resin.
The Chinese used oil as a lubricant, in tanning and medicine to treat skin diseases.
In 347 AD. Chinese geographer Zhang Qu mentioned in his notes that there is a “fire well” at the confluence of the Huojin and Bupu rivers. This is what he called the place where natural gas comes to the surface. According to him, residents of this area bring firebrands here from their fireplaces and get fire by bringing them to the well. To maintain light, people use bamboo pipes; with their help, gas can be transferred from one place to another over a fairly long distance - a day's journey from the well.
Gas was also used to heat boilers in which salt extracted from wells was evaporated.
A reference book from the Qing Dynasty (1644-1912) states that to obtain light and heat, one must make a hole in a leather container filled with gas and set it on fire.
War and “Chinese Greek fire”
Oil, due to its flammable properties, has been used by many peoples not only for peaceful purposes. Thus, “Greek fire,” according to many scientists, included oil, sulfur, bitumen and other flammable substances. The Greeks and Byzantines successfully used it in battles and won, even if the enemy had a numerical superiority. In Byzantium, the composition of “Greek fire” was a state secret, and continued to be used even when gunpowder replaced incendiary mixtures.
The Chinese became acquainted with “Greek fire” relatively late - around 300 BC, but were able to successfully use it in warfare. They combined the petroleum-based flammable composition with another of their inventions - the “fire pipe”, which could spew out a continuous stream of fire. This ancient device had two inlet valves - air was sucked in from one side of the pipe and pushed out on the other. The recipe was kept strictly secret, only that the list of ingredients included, among others, oil and sulfur.
In the 10th century, “fire spears” were invented in China - pipes made of bamboo (or iron), which were filled with a flammable mixture and tied to spears. Such a spear could burn for 5 minutes and was considered a very formidable weapon. In the 14th century, mobile flamethrower batteries on wheels were already used, and, according to one of the Chinese authors of military manuals, one such battery was worth a dozen brave soldiers. At that time, in China, gunpowder began to gradually replace oil in military affairs, and flamethrower batteries were later replaced by cannons.
One can only guess how the oil and gas industry in China might have developed if not for the Manchu conquest that began in 1644. Many industries in the war-torn country have deteriorated and technology has been forgotten. China found itself isolated from the outside world, and feudal relations took root in it for almost three centuries. Only by the middle of the 19th century the beginnings of capitalism began to appear here again.
“The world will tremble when China wakes up”
Napoleon Bonaparte
Main oil and gas provinces of China
The policy of the Chinese government is aimed at the economic development of regions within the framework of the “Stabilization of the East - Development of the West” program. The western and northern regions of China are less developed than the eastern and southeastern coastal provinces.
Currently, nearly three-quarters of China's crude oil comes from three fields on the northeast coast whose reserves have declined significantly (Daqing, Dagang, Jidong, Jilin, Shengli and Liaohe).
The largest group of oil fields, collectively called Daqing, is located in Northeast China in the basin of the Songhuajiang and Oyaohe rivers (the so-called Songliao basin). The field, discovered in 1959, includes the Daqing, Daqing-E, Shengping, Songpantong, Changwo, Changcunlin, Xinchekou, Gaoxi, Putaohua-Abobaota oil fields. Oil reserves in Daqing were estimated at 800-1000 million tons, but recoverable reserves are declining every year. The decline in production averages 12% per year, if in the early 1980s. production was 55-56 million tons per year, then in the middle - already 50 million tons per year.
Adjacent to the Daqing field is the Liaohe field, which produced up to 10 million tons of crude oil per year in 1986-1987, and the Fuyu field with production of 1-2 million tons. An export oil pipeline was laid from Daqing to the ports of Dalian and Qingdao, as well as to Beijing, Anshan and to the Dagang deposit - the largest in Northern China, which in the late 1980s and early 1990s. produced 3-3.5 million tons of oil per year.
In Eastern China, the most famous is the group of deposits under the general name Shengli: Jingqiu, Yihezhuang, Chengdong, Yangsanmu, Hekou Gudao, Gudong, Yunandongxin, Chun Haozhen, Shento, Hajia, Shandian. In 1990, oil production here reached 33 million tons. Oil pipelines were laid from the field to Xi'an and Zhengzhou. In Hebei Province in Eastern China there is the Jingrong field, where oil production amounted to 5 million tons in 1990.
Production in China's eastern fields has been steadily declining since the 1990s. the production volume was more than 105 million tons per year, then in 2004 - 75 million tons per year, which is 1.6% less than in 2003. Naturally, in the face of an inevitable decline in oil production in most depleted eastern oil fields, great hopes are placed on the northwestern regions, which have large oil and gas reserves.
In this regard, the Chinese leadership declared a focus on the development of oil production in the western regions of the country as the main direction of the state oil policy.
The northwestern region of China mainly covers two provinces - Qinghai and Gansu and two autonomous regions - Xinjiang and Tibet. This region accounts for 40% of China's total landmass, but only 4% of the population lives there. The region's share in the country's oil production is 13.9%, oil consumption is 5.8%, and refinery capacity is 10.0%. More than 90% of the region's area is occupied by mountains, high plateaus, the deserted Gobi Desert and other desert areas. The territory is relatively rich in mineral resources, but due to its remoteness, harsh climatic conditions and poor infrastructure, the region is one of the underdeveloped in China.
The North-West region contains six oil and gas provinces, where 30% of the country's total reserves are concentrated.
Production in Xinjiang and Qinghai is increasing at a faster rate than the national average. Five of these oil zones in the northwest, with the exception of Yumen, China's oldest oil field, are projected to increase production over the next 10 to 20 years. The volume of oil production in 2004 in western fields amounted to more than 30 million tons per year, which is 6.0% more than in 2003.
In search of new deposits, China pays great attention to geological exploration in the areas of the largest oil basins - the Tarim, Dzhungar and Tsaidam.
The Tarim, Djungar and Turpan-Hami basins are located in Xinjiang. Oil production from these three basins in 1998 was about 15.5 million tons/year, reached more than 20 million tons/year in 2000-2005 and possibly 29.6 million tons/year by 2015.
The Tarim Basin is the largest unexplored oil field in the world with an area of 560 thousand km2. Over eight years of its development, 27 large oil-bearing formations were discovered, 10 oil and gas fields with a capacity of 600 million tons were discovered, five of which are already being industrially extracted. According to some estimates, potential oil reserves in the Tarim Basin reach 20 billion tons and 9.8 trillion. m3 of natural gas, which exceeds the total proven reserves of China by more than six times.
In the northern part of the Tarim Basin there are deposits Kan, Tamarik, Ichkelik, Duntsulitage, Dongchetan, Bostan, Yakela, Tugalmin, Tergen, Akekum, Santamu, Qunke, Lunnan. In the southern part of the depression there is a group of Tazhong fields (Tazhong-y, Tazhong-4, Tazhong-6, Tazhong-10), connected to the northern Lunnan field by a 315 km pipeline. In addition, oil fields have been discovered in the westernmost part of Tarim on the border with Tajikistan and Kyrgyzstan (Karato, Bashatopu). Oil production is growing at a slow pace: in 1996 - 3.5 million tons, in 1999 - 4.7 million tons, in 2000 - 5 million tons, and by 2010 it is expected to grow to 14 million tons per year .
Development in the Tarim Basin promises to be the most large-scale and capital-intensive in the history of the development of the Chinese oil industry. Capital investment requirements for this field are estimated at several billion dollars. Another problem is that China currently lacks the technical capabilities to explore and develop such a complex basin. The wells here are the deepest in the world (5000 m or more). Geological formations are also highly complex (there are numerous discontinuities), which significantly complicates the search for oil deposits. These factors make drilling in the Tarim Basin very expensive (CERA estimates $2,000-$3,000 per meter). Significant difficulties with logistics, as well as a lack of production and transport capacities, in turn, contribute to an increase in the cost of geological exploration.
Since 1993, China has carried out 3 rounds of oil licensing in the Tarim Basin, as the area needed seismic surveys or exploratory drilling. However, subsequently foreign companies were not allowed to develop the field. Development of the Tarim Basin has been slowed down due to the remoteness and harsh conditions in the region.
It should be noted that the high costs of rail transport seriously undermine the cost of free-well Tarim oil and thus do not support intensive exploration and development of the Tarim field.
In addition, in order to deliver oil to the main industrial centers located on the coast, it is necessary to build an oil pipeline with a length of about 3,000 km. Its potential value is estimated at $10 billion. This is because it must cross the Tarim Basin in an area that is one of the highest in the world. But if all the above difficulties can be overcome, the Tarim Basin will become China's largest source of crude oil.
The International Energy Agency (IEA) estimates that full development of the Tarim Basin and pipeline construction will only occur if the size of proven reserves is sufficient to maintain production at a level of at least 25 to 50 million tons per year, thereby ensuring a corresponding increase in production, sufficient for pipeline construction.
On the territory of the Dzungarian basin, located in the north of the XUAR, there is one of the largest Chinese deposits, Karamay, explored in 1987. The deposit's reserves are estimated at 1.5 billion tons (Karamai, Dushanzi, Shixi, Mabei, Urho, Xiangzijie). There are pipelines Karamay - Urumqi and Karamay - Shanshan. In 2004, the production volume at this field amounted to more than 11 million per year. In addition, the Cayman and Shisi fields are of great importance.
Exploration drilling in the Jidam Basin, northwest of Qinghai Province, began in the mid-50s. But until the early 1980s, when exploration drilling and development activities expanded, the region had rather limited oil production capabilities.
According to the Ministry of Petroleum Industry of the People's Republic of China, Chinese geologists have recently discovered 72 new oil-bearing formations in the north of the Tsaidam Basin. According to Chinese experts, the Nanbasian region will become another promising source of hydrocarbons in China. The basin area is 240 thousand km2. Every day, 4,300 tons of oil and gas condensate are produced there (equivalent to 1,000 m3 of gas per ton of oil). The Lenghu-Lanzhou oil pipeline was built.
In 1998, more than 1.7 million tons of oil were produced in this basin, but in recent years new oil and gas reserves have been discovered there. In 2000, extraction from fields increased to 2 million tons per year, and by 2015 it will increase to 5 million tons per year.
The Changqing oil field is located in the Shen-Gang-Ning basin, which extends across the Gansu Province of the Ningxia Hui Autonomous Region and Shaanxi Province. Despite the fact that exploratory drilling in this basin began in the 50s, industrial development of the field did not begin until the 70s. The recent discovery and development of a large gas field, with reserves estimated at more than 20 trillion cubic feet, greatly enhances the prospects of this basin. Oil production there in 2004 amounted to more than 8 million tons and may increase by 2015 to 11 million tons/year.
Yumen, China's oldest oil field with industrial reserves, is called the cradle of the country's oil industry. At the end of the 50s, oil production there reached 1.5 million tons per year and since then, as the field is depleted and aged, it has been declining. Currently, the volume of oil production in Yumen is about 0.5 million tons per year and will decrease from year to year.
Currently, more than 90% of the country's oil is produced on land. However, in parallel with the development of new fields in the west, China has intensified geological and geophysical exploration on the continental shelf in the Bohai Gulf, in the southern part of the Yellow Sea, as well as in the waters of the East China and South China Seas. Oil fields have also been discovered on the shelf of the island. Hainan (Wenchang, Lintou, Ledong). Potential oil reserves on the shelf of the South China Sea (which, however, are claimed by at least 12 countries in the region) are estimated at 10-16 billion tons. In the South China Sea region in the 1990s, 150-200 million tons of oil were produced in year (all countries of the region), of this volume on the entire shelf of China - more than 16 million tons.
The largest foreign oil companies are actively involved in carrying out work on the continental shelf. Large oil reserves (300 million tons) have been explored in the Bohai Bay or the Bozhong complex. The oil fields here are divided into blocks, and since 1997 they have been developed by foreign companies (Chevron, Agip, Samedan, Esso China Upstream, Wood Mackenzie, Phillips Petroleum International Corporation Asia (together with the Chinese company CNODC). In 2000, oil production in the Bohai Bay amounted to 4 million tons per year.
The total reserves on the Chinese shelf are estimated at 20-25 billion tons, of which less than 1/10 has been explored so far. To date, 280 wells have been drilled and 42 oil structures are being explored. At the same time, 84 wells have so far shown the presence of oil and gas.
Until recently, oil production volumes on the continental shelf grew at the highest rates (in 1996 they increased immediately from 9 to 15 million tons and amounted to 10% of total production in the country). However, in the future (until approximately 2010), the achieved level of oil production is expected to stabilize. According to foreign experts, obtaining a new, equally significant increase in oil production is associated with significant financial costs and can only be achieved over a fairly long period of time.
China's oil refining capacity
The total capacity of oil refineries is currently about 315 million tons per year and, by and large, occupies the second oil field in Asia after Japan.
A significant part of the oil refining capacity is located in the north-west and north of the country, where the country's largest oil fields are located. Rapid economic growth and an increased need for oil imports have given impetus to the construction of new refineries and the expansion of existing capacities in the southeastern coastal regions, as well as in the Yangtze River Delta. In the early 1990s. The capacity utilization rate at most Chinese refineries did not reach 70% of the design value and increased only as a result of the policy of banning imports of gasoline and gas oil in the late 1990s.
According to experts, the national companies CNPC and SINOPEC are faced with the need to carry out technical modernization of existing refineries and increase their productivity. Most of the capacity expansion is expected to occur in the southeastern coastal regions, although new refineries are planned for the southwestern region, where there are no major refining centers. For example, in Danyazhou, Hainan province, the largest and most modern oil refinery in China was recently built, the cost of the first stage is about 2.2 billion dollars. The growth of the total production capacity of the country's refineries is projected to reach 360 million tons per year by 2010 and 400 million tons per year by 2015 (See Table 1).
Table 1
Projected growth of oil refining capacity in China, million tons/year
District 2000 2005 2010 2015
Northeast 80 73 84 88
Northwestern 25 25 34 39
Northern and Central 60 69 80 88
Eastern 69 83.5 99 105
Yuzhny 35 44 53 65
Southwestern 1 1.5 10 15
Total 270 296 360 400
There are five oil refineries in the northwestern region, as well as two petrochemical plants in Lanzhou and Urumqi with a capacity of up to 1 million tons per year. Refineries in Lanzhou, Dushanzi and Yumen have fairly advanced oil secondary processing units and are able to satisfy the demand for various petroleum products in the domestic market. Other refineries are relatively simple and do not have installations for complex technological processes in their designs (See Table 2).
table 2
Oil refining capacity in northwest China, million tons per year
Refinery Capacity
Dushanzi 6.0
Karamay 3.6
Urumqi 2.7
Lanzhou 5.7
Yumen 4.0
Golmud 1.0
Total 23
Transport infrastructure
China has a sufficient network of oil pipelines to transport the oil it currently produces. This 11 thousand km long system makes it possible to transport more than 90% of the crude oil produced in oil fields. However, despite the fact that oil production volumes are not increasing, the coverage of the oil pipeline network in some territories is insufficient.
Most of the existing oil pipelines are laid in the northeast and north of the country to deliver oil to refineries located in the same region. Most refineries located in the south and Yangtze River basin receive oil by sea, and only a small number of refineries in central China still rely on rail transport.
The country lacks pipeline infrastructure for the transport of petroleum products, with the exception of a small diameter line connecting Golmud in Qinghai province with Lhasa in Tibet. All required volumes of petroleum products are supplied to consumers by rail, water or road transport.
Transport infrastructure in the west and north-west is poor compared to other parts of the country, and the total length of the system in the entire region is about 5,000 km. (See Table 3).
Table 3
Oil pipeline transport in the west and northwest of China
Name Length, km Throughput, million t/y
Karamay-Urumqi 370 4
Karmay-Dushanzi 322 4
Lanzhou-Golmud 438 3
Golmud-Lhasa/petroleum products/2 loopings 1,143 1
Lanzhou-Yumen 628 3
Meilin-Zhongning 315 6
Tazhong-Longnan 330 6
Longnan-Korla 103 10
Korla-Shanshan 475 10
There is only one major railway connecting Urumqi to central China, and there are several railway lines in Xinjiang, Qinghai and Gansu.
Along with resource development, several local pipelines have been built in the northwest region to transport crude oil to refineries and consumption centers. Major oil pipelines connect Karamay with refineries in Urumqi and Dushanzi in Xinjiang province, and oil pipelines are laid from the Lenghu field to refineries in Golmud (Qinghai Province) and Yumen (Gansu Province). Oil from the Chengqing field is piped to Zhongning in Ningxia Hui Autonomous Region and then loaded into rail tank cars for delivery to Lanzhou. In recent years, several local oil and gas pipelines have also been built in the Tarim Basin to export oil from the region.
Due to the fact that oil production in Xijiang exceeds the capacity of refineries in Urumqi and Dushanzi, excess oil is exported to the south and east of the country. Currently, the volume of Xinjiang oil transported by rail eastward is more than 10 million tons per year.
As noted above, the required volume of oil from Xinjiang must reach at least 25 million tons per year and above to load the main oil pipeline in the country - first to Lanzhou, Central China (1,800 km) and then on to the east coast of China in Sichuan Province ( 1,000 km).
The project to build a main oil pipeline from Xinjiang to Lanzhou in CNPC has been repeatedly lobbied for in order to more efficiently supply oil refineries in the south and east of the country. However, limitations in the potential volumes of oil production in Tarim have called the economic viability of the pipeline into question. Only by signing a package of oil agreements with Kazakhstan in 1997, including the construction of a pipeline from Western Kazakhstan to China, did China solve the problem of implementing an internal pipeline to the east of its country.
Construction of the first stage of the Atasu (Kazakhstan) - Alashankou (China) oil pipeline in 2005-2006, as well as the implementation of the second stage Kenkiyak-Kumkol-Atasu (Kazakhstan) in 2009-2010. with a capacity of 20 million tons per year will ensure the loading of the West-East oil pipeline in China.