China has joined the world's elite club of offshore oil producers after China National Offshore Oil Corp (CNOOC) announced that its oil and natural gas output surpassed 60 million metric tonnes in 2010.
The country's largest offshore oil explorer's oil and gas production last year totalled 64.13 million metric tonnes of oil equivalent, of which 50 million was produced domestically, said its president Fu Chengyu on Tuesday.
“It marks a milestone that China has become one of the world's largest offshore oil producers after the United States, the United Kingdom, and Norway ... And the marine petrochemical industry will boost the country's energy supply,” said Mr. Fu.
China's surging energy demand has led the nation's foreign oil dependence ratio to reach a new high of 55 per cent in 2010.
“We estimate that 60 per cent of China's oil consumption will be imported by 2020,” said Wang Jiacheng, a researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission.
Consequently, offshore oil exploration, which is still at an early stage, has become a major factor in quenching the nation's thirst for the natural resource. “We expect our gas and oil output to exceed 200 million metric tonnes of oil equivalent by 2020, including 50 million tonnes of LNG [liquefied natural gas],” Mr. Fu told China Daily.
He added that about 800 billion yuan ($121 billions) to 1 trillion yuan would be invested during the 12th Five-Year Plan (2011-2015), with the majority going to offshore oil exploration.
The company's total profits exceeded 90 billion yuan in 2010, up over 70 per cent from 2009's 52.4 billion yuan, said Mr. Fu.
Offshore oil will make up 40 per cent of the world's oil output by 2015, compared with 34 per cent in 2004, according to figures from the China Petroleum and Petrochemical Engineering Institute. Offshore gas will account for 35 per cent of the world's gas output over the same period. China's central government said in its 12th Five-Year Plan that the country should develop and implement a marine development strategy, and improve technical ability and comprehensive management.
CNOOC has tapped into Africa, South America, West Asia, and Australia for cooperation opportunities in oil and gas projects.
“We hope to integrate into the global economy through international cooperation and support other countries' development,” Mr. Fu said.
In addition, CNOOC has also tried to develop deepwater oil and gas resources, an area that has a large growth potential.
“The world's offshore oil detection rate is 73 per cent on average, while in China the rate is only 12.3 per cent. There's still large room for offshore oil exploration, particularly in the deepwater area,” said Rui Dingkun, a senior analyst at China Jianyin Investment Securities.
“We'll speed up technology innovation to develop more home grown equipment to meet a need for deepwater exploration,” Mr. Zhou said, adding that the company has also focused on deepwater drilling safety.
Keywords: Chinese oil exports