CNPC Takes Overseas Oil and Gas Cooperation in Stride

China National Petroleum Corporation (CNPC) has enhanced its overseas oil and gas cooperation in recent years.

As oil and gas are still the main energy sources in the world and cooperation between countries involved in the BRI is growing, it is an opportunity for CNPC to develop its overseas oil and gas businesses.

In recent years, CNPC's overseas oil and gas cooperation has largely increased, covering 35 countries in the Middle East, the Central Asia, Southeast Asia and Africa.

Among all the projects CNPC leads or is involved in, the Yamal LNG Project is an outstanding example which shows the company's engagement in the Belt and Road Initiative in terms of overseas energy cooperation.

The project was the first super-large energy cooperation initiated after BRI was put forward in 2013. Its first production line went into operation at the end of 2017 and fuel produced by the second line was shipped on August 9, 2018.

Development of CNPC's overseas oil and gas cooperation

CNPC started its overseas business since 1993, stressing both domestic and international markets.

In the past more than 20 years, the volume and value of CNPC's international trade have been growing and the company's brand effects, comprehensive competitiveness and international management have strengthened.

CNPC is now managing a total of 93 overseas oil and gas cooperative projects in 35 countries, and has international businesses in more than 80 countries and regions. Fifty projects are in 19 countries involved in the BRI. 

Its materials and equipment products are exported to 78 countries and regions. More than 1,200 engineering technical service teams have been sent to over 60 countries for engineering construction and technical services.

To date, the strategic layout of five oil and gas cooperation zones, four oil and gas channels and three international oil and gas operation centers is basically completed and constitutes an integrated service chain.

By the end of 2017, CNPC had built about 15,000 kilometers of pipelines for oil and gas transportation which can transfer 85.5 million tons of oil and 67.4 billion cubic meters gas per year.

The company has four refining projects in operation that can process 13 million tons of crude oil.

It's worth mentioning that more and more oil and gas cooperation projects have been signed between CNPC and foreign companies.

On July 19, 2018, CNPC's Bureau of Geophysical Prospecting INC. (BGP) reached an agreement with Abu Dhabi National Oil Company (ADNOC) on marine and land three-dimension collection. The contract, valued at $1.6 billion, is the most expensive 3D operation in geographical prospecting in the world.

On July 30, 2018, China Petroleum Pipeline Engineering Co., Ltd. (CPP) and Saudi Arabian Oil Company (Saudi Aramco) signed an agreement on pipeline renovation and extension in Saudi's Haradh and Hawiyah areas, which involved up to 3.79 billion yuan ($554 million).

At CNPC's leader meeting at the end of last July, the stress was on promoting opening-up and cooperation and creating an international oil and gas community of shared interests.

CNPC will continue to promote high-quality development of the overseas oil and gas business and drive export engineering technical services through oil and gas investment.

Seizing chances brought by BRI

Many countries involved in the BRI have rich oil and gas resources and have great demands in terms of exploration, pipeline construction and refining and chemical technology.

It is estimated that about $1 trillion is needed for production of 2.88 billion tons of oil and 290 million cubic meters of gas in BRI countries and $100 billion should be invested in installation of nearly 20,000 kilometers of pipeline by 2030.

These countries need to invest more than $100 billion to improve their refining capacity to more than 200 million tons of crude oil before 2020.

However, most of them have problems such as shortage of funds, gaps in technology and lack of exploration equipment, which brings opportunities to foreign oil and gas companies like CNPC.

With the development of the oil and gas trades under the BRI, LNG and storage infrastructure construction that promotes oil and gas businesses become the main cooperative items.

In speaking of the macro-environment of oil and gas cooperation, Jiang Xuefeng, an energy expert, said China and BRI countries have established solid foundations and rich experiences through cooperation. Adding supportive policies and the new international orders and global markets, oil and gas cooperation along the Silk Road Economic Belt has entered an era full of opportunities.

CNPC gains achievements in oil and gas cooperation

CNPC has been exploring a win-win cooperation mode for years with remarkable successes around the world.

Its Middle East branch lowered the cost of barrel handling by 14 percent compared to the predicted charges last year and the company's profits exceeded the average budget by 150 percent.

In Central Asia, construction of the core oil and gas cooperation zone was rapidly pushed forward.

Oil and gas production of China-Kazakhstan projects has increased. For instance, in its first half year in 2018, CNPC's branch in Central Asia produced 9.51 million tons of crude.

In August of that same year, the second phase of renovation of Kazakhstan's Chimkent Refinery passed testing and the gas field of the East of Amu Darya River (Turkmenistan) Gas Processing Plan started construction.

CNPC now has oil and gas cooperation with 30 African countries and cooperative projects and engineering service businesses with eight of them.

The Latin America branch of CNPC has strengthened its innovation-driven management and realized profit before tax of $293 million. PetroChina International Pte Ltd  has purchased 30 percent of the shares of Brazil's TT Work.

(Executive editor: Li Shuling)