Oil in China
Encyclopedia
The petroleum industry in the People's Republic of China
is strongly affected by the country's growing population and political ideology, as well as its lack of local oil reserves. It highlights the current set up of the government, their relationship with surrounding states, and steps they are taking to play a positive role in the worldwide community.
China
has a growing population of over 1.3 billion people; therefore they rely heavily on other states for resources, such as oil
. The Chinese government is taking diplomatic action to improve their relationship with ASEAN states. The Chinese government has to take extra strides to secure good relationships with its neighbors. Malaysia is a neighbor state that is often seen as in contention with China
because of political differences. Yet, the relationship with Malaysia is symbiotic because of their large supply of oil
and their need for security assurances from China
. Malaysia is the number one producer of petroleum
in the South China Sea
, and they account for over one half of the production in the region.
A big role is played in China
's oil endowment by its state owned oil companies, mainly China National Offshore Oil Corp, China National Petroleum Corp, and Sinopec
.
pursued domestic opportunities (before the 1950s importing all of its oil
needs). Because of the relatively assembly line method behind Chinese oil exploration in the years following 1950 a bulleted, chronological presentation would better suit the information.
• 1959: Vast reserves discovered in Songhua Jiang-Liao basin in northeast China
.
• 1960: Daqing
oil field in Heilongjiang
Province becomes operational.
• 1963: By this Time Daqing
oil field producing nearly 2.3 million tons of oil.
• 1965: As Daqing
production wanes, oil field
s in Shengli, Shandong
, Dagang, and Tianjin
yield enough oil to nearly eliminate the need of importing crude oil.
• 1973: As production rates increase, China
explores exportation possibilities—exporting of crude oil to Japan
begins. Offshore drilling exploration begins as well.
• 1974: Exports increase to 6.6 million tons.
• 1978: Exports increase to 13.5 million tons.
• 1985: Exports increase to 20 million tons.
• 1993: Internal demand for oil
exceeds its domestic production—exports no longer possible.
As demand exceeds its production, exporting of oil to its former largest importer, Japan
, became impossible. Since its first days as a modern day importer (as opposed to its oil importing days before the 1950s) in the 1990s it has grown to be the second-largest oil-consuming nation, next to only the United States
. Much of China
's oil imports derived largely from Southeast Asia
, but it's, again, growing demand has forced it to import oil from all over the globe.
's oil relationship with other countries has shifted from that of a world exporter to that of a world importer. This shift to dependence on foreign oil has changed the exploration and acquisition policies of China
. China
's oil need overwhelms its internal capabilities. Oil acquisition is now a process of investment in foreign lands and a creation of an internal oil reserve in case of emergency. China
has taken steps to alter its security polices in places in the world that are rich in oil. China National Petroleum Corporation
is invested in producing, marketing, and supplying oil in China
. This company supports internal sources of oil production and reserves. Domestic oil production supplies only two thirds of the countries oil needs and it is estimated that China
will require 600 million tons of crude oil by 2020. Based on this fact China
has begun to take drastic measures with its internal oil reserve programs. A purely importation driven oil plan would leave China
vulnerable to market fluctuations and more susceptible to international oil conflicts due to their dependence.
To combat this dangerous position of foreign dependence China
is investing in its first national oil reserve base, a program beginning in 2004. There are three different providences in which they are focusing. The first Zhoushan
, Zhejiang
Province, was built by Sinopec
, China
's largest oil refining company. The storage space is 5.2 million cubic meters says the National Development and Reform Commission
. Zhejiang
was originally a commercial oil transfer base. Its coastal position makes it convenient for movement purposes, although it is at the same time vulnerable to offshore violence. The next reserve of interest In Huangdao or Qingdao
, Shangdong Province and the final Dalian
, Liaoning
Province. All of these reserves are coastal and with their creation comes vulnerability to possible coastal attacks. These stockpiling strategies, as well as the international acquisition companies, are state-run initiatives to combat supply disruption. In 1993 (after China
became a net importer of oil) China projected that these stockpiling sites would be filled and provide for 90 days of oil. This goal, however, is yet to be fulfilled.
Along with an emphasis on defensive oil stocks, there is a significant push to create an offensive oil acquisition program. Offshore drilling rigs have been approved by all levels of the Chinese government. Liuhua 11-1 is the largest oil field in the South China Sea
. Amco
and Nanhai East engineering teams experimented with offshore drilling techniques, a floating production system that would have drilling and production support. This kind of breakthrough is what China
has been looking for, due to the protection from market fluctuations and their dependence on imports. The FPSO
(floating production, storage and off-loading system) has equipment capable of handling 65,000 bbl of oil and 300,000 bbl of total fluids per day and it would be loaded and shipped by shuttle tankers. Experimental possibilities like drilling in the South China sea
exemplify the independent capabilities that China
possesses for its oil production and acquisition projects.
The oil stocks and offshore reserves both share vicinity to the sea. This is an asset when one considers the relative ease of transportation. It is also a weakness because, as mentioned before, the stocks and reserves are not protected by land. The Taiwanese security question is presented: how long could China
sustain a cross-straight assault? All three of the stock oil bases are within range of Taiwan
ese cruise missile attacks. Therefore as the issue of oil acquisition is presented, so is the issue of energy security
follows close behind.
China
's oil output is far lower than its domestic need as its growing economy demands greater and greater amounts of crude oil every year. In 2004, China
had to import 100 million tons of crude oil to supply its energy demand, more than half of which came from the Middle East
. It is a possibility that high oil prices could quell global economic growth in China
. This is one of the reasons why it no longer exports oil to Japan
who formerly depended heavily on Chinese oil. They had major disagreements on prices and China
decided to cease the trade agreement. China
is attempting to secure its future oil share and establish deals with other countries. Chinese President Hu Jintao
has proposed to build a pipeline from Russia
n oil fields to support China
's markets as well as other billion-dollar arrangements with Russia
, Central Asia, and Burma. They have recently purchased less than 1 percent of the British oil company BP
, worth about $1.97 billion.
China
's oil industry is dominated by its state owned oil companies, in particular three major players: China National Offshore Oil Corp, China National Petroleum Corp, and Sinopec
. These companies have largely invested in exploration and development in countries that have oil fields but do not have funds or technology to develop them. CNOOC signed a deal to extract a million barrels of oil a day in Indonesia
as well as other projects with Australia. In addition, an oil reserve that will theoretically fill with 30 days worth of oil has begun construction in China
. However, their oil policy on the world oil market has not been completely clear as to how they will deal with the situation as a whole.
In order to obtain oil, China
must import from states that can be considered unstable. China
's need for oil may outweigh the costs of importing from a conflict-laden Middle East
. China
is striving to diversify their energy sector by seeking imports from other regions of the world and by starting alternative energy programs such as nuclear
. China
's oil endowment is going to be a program that will require an eclectic mix of domestic oil use, imports from all over the world, and development of alternative forms of energy.
As of 2010 China consumed 455 million tons oil of which over 200 million tons were imported. China's oil demand is expected to increase by 6% in 2011 according to PetroChina.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
is strongly affected by the country's growing population and political ideology, as well as its lack of local oil reserves. It highlights the current set up of the government, their relationship with surrounding states, and steps they are taking to play a positive role in the worldwide community.
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
has a growing population of over 1.3 billion people; therefore they rely heavily on other states for resources, such as oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
. The Chinese government is taking diplomatic action to improve their relationship with ASEAN states. The Chinese government has to take extra strides to secure good relationships with its neighbors. Malaysia is a neighbor state that is often seen as in contention with China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
because of political differences. Yet, the relationship with Malaysia is symbiotic because of their large supply of oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and their need for security assurances from China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. Malaysia is the number one producer of petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
in the South China Sea
South China Sea
The South China Sea is a marginal sea that is part of the Pacific Ocean, encompassing an area from the Singapore and Malacca Straits to the Strait of Taiwan of around...
, and they account for over one half of the production in the region.
A big role is played in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil endowment by its state owned oil companies, mainly China National Offshore Oil Corp, China National Petroleum Corp, and Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
.
History
Looking to capitalize on petroleum trade and also to participate in the growing demand and marketplace for the black liquid, ChinaChina
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
pursued domestic opportunities (before the 1950s importing all of its oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
needs). Because of the relatively assembly line method behind Chinese oil exploration in the years following 1950 a bulleted, chronological presentation would better suit the information.
• 1959: Vast reserves discovered in Songhua Jiang-Liao basin in northeast China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
• 1960: Daqing
Daqing
Daqing is a prefecture-level city in the west of Heilongjiang province of Northeast China. The name literally means "Great Celebration".Its population is 2,904,532 at the 2010 census whom 1,042,902 in the built up area made of 4 out of 5 urban districts It was founded in 1959 to house workers...
oil field in Heilongjiang
Heilongjiang
For the river known in Mandarin as Heilong Jiang, see Amur River' is a province of the People's Republic of China located in the northeastern part of the country. "Heilongjiang" literally means Black Dragon River, which is the Chinese name for the Amur. The one-character abbreviation is 黑...
Province becomes operational.
• 1963: By this Time Daqing
Daqing
Daqing is a prefecture-level city in the west of Heilongjiang province of Northeast China. The name literally means "Great Celebration".Its population is 2,904,532 at the 2010 census whom 1,042,902 in the built up area made of 4 out of 5 urban districts It was founded in 1959 to house workers...
oil field producing nearly 2.3 million tons of oil.
• 1965: As Daqing
Daqing
Daqing is a prefecture-level city in the west of Heilongjiang province of Northeast China. The name literally means "Great Celebration".Its population is 2,904,532 at the 2010 census whom 1,042,902 in the built up area made of 4 out of 5 urban districts It was founded in 1959 to house workers...
production wanes, oil field
Oil field
An oil field is a region with an abundance of oil wells extracting petroleum from below ground. Because the oil reservoirs typically extend over a large area, possibly several hundred kilometres across, full exploitation entails multiple wells scattered across the area...
s in Shengli, Shandong
Shandong
' is a Province located on the eastern coast of the People's Republic of China. Shandong has played a major role in Chinese history from the beginning of Chinese civilization along the lower reaches of the Yellow River and served as a pivotal cultural and religious site for Taoism, Chinese...
, Dagang, and Tianjin
Tianjin
' is a metropolis in northern China and one of the five national central cities of the People's Republic of China. It is governed as a direct-controlled municipality, one of four such designations, and is, thus, under direct administration of the central government...
yield enough oil to nearly eliminate the need of importing crude oil.
• 1973: As production rates increase, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
explores exportation possibilities—exporting of crude oil to Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
begins. Offshore drilling exploration begins as well.
• 1974: Exports increase to 6.6 million tons.
• 1978: Exports increase to 13.5 million tons.
• 1985: Exports increase to 20 million tons.
• 1993: Internal demand for oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
exceeds its domestic production—exports no longer possible.
As demand exceeds its production, exporting of oil to its former largest importer, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, became impossible. Since its first days as a modern day importer (as opposed to its oil importing days before the 1950s) in the 1990s it has grown to be the second-largest oil-consuming nation, next to only the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Much of China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil imports derived largely from Southeast Asia
Southeast Asia
Southeast Asia, South-East Asia, South East Asia or Southeastern Asia is a subregion of Asia, consisting of the countries that are geographically south of China, east of India, west of New Guinea and north of Australia. The region lies on the intersection of geological plates, with heavy seismic...
, but it's, again, growing demand has forced it to import oil from all over the globe.
Current situation and future plans
ChinaChina
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil relationship with other countries has shifted from that of a world exporter to that of a world importer. This shift to dependence on foreign oil has changed the exploration and acquisition policies of China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil need overwhelms its internal capabilities. Oil acquisition is now a process of investment in foreign lands and a creation of an internal oil reserve in case of emergency. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
has taken steps to alter its security polices in places in the world that are rich in oil. China National Petroleum Corporation
China National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...
is invested in producing, marketing, and supplying oil in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. This company supports internal sources of oil production and reserves. Domestic oil production supplies only two thirds of the countries oil needs and it is estimated that China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
will require 600 million tons of crude oil by 2020. Based on this fact China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
has begun to take drastic measures with its internal oil reserve programs. A purely importation driven oil plan would leave China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
vulnerable to market fluctuations and more susceptible to international oil conflicts due to their dependence.
To combat this dangerous position of foreign dependence China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
is investing in its first national oil reserve base, a program beginning in 2004. There are three different providences in which they are focusing. The first Zhoushan
Zhoushan
Zhoushan or Zhoushan Archipelago New Area; formerly transliterated as Chusan, is a prefecture-level city in northeastern Zhejiang province of Eastern China. The only prefecture-level city of the People's Republic of China consisting solely of islands, it lies across the mouth of the Hangzhou Bay,...
, Zhejiang
Zhejiang
Zhejiang is an eastern coastal province of the People's Republic of China. The word Zhejiang was the old name of the Qiantang River, which passes through Hangzhou, the provincial capital...
Province, was built by Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's largest oil refining company. The storage space is 5.2 million cubic meters says the National Development and Reform Commission
National Development and Reform Commission
The National Development and Reform Commission , formerly State Planning Commission and State Development Planning Commission, is a macroeconomic management agency under the Chinese State Council, which has broad administrative and planning control over the Chinese economy...
. Zhejiang
Zhejiang
Zhejiang is an eastern coastal province of the People's Republic of China. The word Zhejiang was the old name of the Qiantang River, which passes through Hangzhou, the provincial capital...
was originally a commercial oil transfer base. Its coastal position makes it convenient for movement purposes, although it is at the same time vulnerable to offshore violence. The next reserve of interest In Huangdao or Qingdao
Qingdao
' also known in the West by its postal map spelling Tsingtao, is a major city with a population of over 8.715 million in eastern Shandong province, Eastern China. Its built up area, made of 7 urban districts plus Jimo city, is home to about 4,346,000 inhabitants in 2010.It borders Yantai to the...
, Shangdong Province and the final Dalian
Dalian
Dalian is a major city and seaport in the south of Liaoning province, Northeast China. It faces Shandong to the south, the Yellow Sea to the east and the Bohai Sea to the west and south. Holding sub-provincial administrative status, Dalian is the southernmost city of Northeast China and China's...
, Liaoning
Liaoning
' is a province of the People's Republic of China, located in the northeast of the country. Its one-character abbreviation is "辽" , a name taken from the Liao River that flows through the province. "Níng" means "peace"...
Province. All of these reserves are coastal and with their creation comes vulnerability to possible coastal attacks. These stockpiling strategies, as well as the international acquisition companies, are state-run initiatives to combat supply disruption. In 1993 (after China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
became a net importer of oil) China projected that these stockpiling sites would be filled and provide for 90 days of oil. This goal, however, is yet to be fulfilled.
Along with an emphasis on defensive oil stocks, there is a significant push to create an offensive oil acquisition program. Offshore drilling rigs have been approved by all levels of the Chinese government. Liuhua 11-1 is the largest oil field in the South China Sea
South China Sea
The South China Sea is a marginal sea that is part of the Pacific Ocean, encompassing an area from the Singapore and Malacca Straits to the Strait of Taiwan of around...
. Amco
Amco
The Amco was an American automobile manufactured primarily for the export market, designed by D.M. Eller and built by American Motors Incorporated of New York City....
and Nanhai East engineering teams experimented with offshore drilling techniques, a floating production system that would have drilling and production support. This kind of breakthrough is what China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
has been looking for, due to the protection from market fluctuations and their dependence on imports. The FPSO
FPSO
FPSO may be:* Fleet Publication Supply Office* Floating Production Storage and Offloading, an offshore oil & gas industry vessel* Forms and Publications Supply Office, by CINCPAC in the United States military* Foster Parent Society of Ontario...
(floating production, storage and off-loading system) has equipment capable of handling 65,000 bbl of oil and 300,000 bbl of total fluids per day and it would be loaded and shipped by shuttle tankers. Experimental possibilities like drilling in the South China sea
South China Sea
The South China Sea is a marginal sea that is part of the Pacific Ocean, encompassing an area from the Singapore and Malacca Straits to the Strait of Taiwan of around...
exemplify the independent capabilities that China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
possesses for its oil production and acquisition projects.
The oil stocks and offshore reserves both share vicinity to the sea. This is an asset when one considers the relative ease of transportation. It is also a weakness because, as mentioned before, the stocks and reserves are not protected by land. The Taiwanese security question is presented: how long could China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
sustain a cross-straight assault? All three of the stock oil bases are within range of Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
ese cruise missile attacks. Therefore as the issue of oil acquisition is presented, so is the issue of energy security
Energy security
Energy security is a term for an association between national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led...
follows close behind.
China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil output is far lower than its domestic need as its growing economy demands greater and greater amounts of crude oil every year. In 2004, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
had to import 100 million tons of crude oil to supply its energy demand, more than half of which came from the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
. It is a possibility that high oil prices could quell global economic growth in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. This is one of the reasons why it no longer exports oil to Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
who formerly depended heavily on Chinese oil. They had major disagreements on prices and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
decided to cease the trade agreement. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
is attempting to secure its future oil share and establish deals with other countries. Chinese President Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...
has proposed to build a pipeline from Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
n oil fields to support China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's markets as well as other billion-dollar arrangements with Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Central Asia, and Burma. They have recently purchased less than 1 percent of the British oil company BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
, worth about $1.97 billion.
China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil industry is dominated by its state owned oil companies, in particular three major players: China National Offshore Oil Corp, China National Petroleum Corp, and Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
. These companies have largely invested in exploration and development in countries that have oil fields but do not have funds or technology to develop them. CNOOC signed a deal to extract a million barrels of oil a day in Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
as well as other projects with Australia. In addition, an oil reserve that will theoretically fill with 30 days worth of oil has begun construction in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. However, their oil policy on the world oil market has not been completely clear as to how they will deal with the situation as a whole.
In order to obtain oil, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
must import from states that can be considered unstable. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's need for oil may outweigh the costs of importing from a conflict-laden Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
is striving to diversify their energy sector by seeking imports from other regions of the world and by starting alternative energy programs such as nuclear
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
. China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's oil endowment is going to be a program that will require an eclectic mix of domestic oil use, imports from all over the world, and development of alternative forms of energy.
As of 2010 China consumed 455 million tons oil of which over 200 million tons were imported. China's oil demand is expected to increase by 6% in 2011 according to PetroChina.