china's growing energy appetite
TRANSCRIPT
*China's Growing Energy
Appetite
Energy supply (oil)
Critical issues in developing
Foreign relations about energy security
Prospects for the energy sector
Secure energy supply
Conclusion
*Overview
*Energy outlook
In 2010, China’s crude oil production has increased
to 4.1 million b/d (203 million tons)
China’s total oil demand in 2009 averaged around
8 mb/d (385 Mt)
China is highly dependent on the Middle East,
which accounted for more than 50% of the total
crude oil imports in 2011, followed by Africa
(around 24%). By country, Saudi Arabia (20% of the
total) was the biggest import source of crude oil in
2011
*Oil
National Oil Companies (NOC):
China National Petroleum Corporation (CNPC);
China Petroleum and Chemical Corporation
(Sinopec);
China National Off shore Oil Corporation (CNOOC);
China National Chemicals Import and Export
Corporation (Sinochem).
*Oil Company Operations
• 70% of China’s domestically produced crude oil is
transported through the pipelines.
• The China-Russia spur of the East Siberian oil
pipeline
• China-Kazakhstan oil pipeline
• China-Myanmar oil pipeline
*Ports and Pipelines
Phase 1: 1978 - 1992
Self-reliance and self-sufficiency
Phase 2: 1993 - 1999
Production of oil can no longer meet domestic demand
Phase 3: 2000 - 2008
“Go global” starts to become the main slogan and
government encourages firms to go abroad
Phase 4: 2008 - present
“Go abroad and buy,” is the response to the financial
turmoil that began in 2008
*The Development History
of China’s Oil Industry
A persistent supply-demand gap
Low energy efficiency
Artificially low electricity tariffs
Insufficient capital investment
Unproductive state-owned enterprises
*Critical issues in developing
the energy sector
o Middle East
On the issue of energy security, China relies mainly on
Persian Gulf exports.
o Japan and Korea
China does its best to stabilize exports to Japan and
Korea;
Since China lacks strategic entrepot refineries, it relies
heavily on refineries in Singapore, Japan, and Korea.
*Foreign relations about
energy security
o Russia
the Eastern Siberia–Pacific Ocean oil pipeline
o Australia
PetroChina signed an A$50 billion deal with American multinational petroleum company ExxonMobil to purchase liquefied natural gas from the Gorgon field in Western Australia
o Central Asia
oil pipeline from Kazakhstan;
Central Asia–China gas pipeline.
*Foreign relations about
energy security
Foreign investment
to meet China’s future capacity requirements, the
government announced that at least 20% of this
development would still be financed from abroad
Governance structure and enterprise reform
there exists a problem in the delineation of the
responsibilities of central and local government.
Impact of WTO membership
China has to follow the international rules governing
competition and trade
*Prospects for the energy
sector
increasing production of natural gas and nuclear
power
developing clean energy technology to generate
gasoline and diesel from coal
increasing the use of other renewable energy sources
such as wind power and solar energy
enhancing the existing oil and natural gas supply
sources
diversifying import routes by reducing import
dependence from the Middle East
*Secure energy supply
increasing imports from Central Asia and Russia in order to reduce transportation risk
strengthening energy exploration and production (E&P) of new oil fields domestically
encouraging international cooperation in offshore oil exploration and production
increasing the number of Strategic Petroleum Reserve sites
raising mandatory stockpile requirements for major oil firms
*Secure energy supply
“is at a disadvantage as it
is not an Arctic state but
is still keen to have the
right to access natural
resources.”
*Eye on the Arctic Sea?
Energy policy will continue as part of foreign
policy as long as China’s economy continues to
grow well…
*Conclusion