Latest news with #PetroChina
Mint
a day ago
- Business
- Mint
How China curbed its oil addiction—and blunted a US pressure point
China's thirst for oil drove global demand for decades. Now a government campaign to curb that addiction is nearing a milestone, with national consumption expected to peak by 2027, then begin to fall. Chinese officials have long worried that the U.S. and its allies could hamstring the nation's economy by choking off its supply of foreign oil. So China has poured hundreds of billions of dollars into weaning itself off the imported stuff by reviving domestic production and swiftly building the world's leading electric-vehicle industry. 'The energy rice bowl must be held in our own hands," Chinese leader Xi Jinping has said. Across China, fleets of gas-guzzling Volkswagen and Hyundai taxicabs are being replaced by electric models designed and produced locally. Last year, nearly half of passenger vehicles sold in the country were either all-electrics or plug-in hybrids, compared with 6% in 2020. In a remote corner of China called the 'sea of death" for its harsh conditions, oil workers are trying to coax more crude out of the ground by drilling holes as deep as Mt. Everest is high. State-owned PetroChina reported $38 billion of capital expenditures last year, nearly as much as Exxon Mobil's and Chevron's combined. China boosted oil output by 13% from 2018 to 2024, to around 4.3 million barrels a day. Crude imports fell nearly 2% last year, though they have rebounded slightly this year as some Chinese companies built stockpiles. China's biggest state oil companies and the International Energy Agency all forecast that China's demand for oil will likely peak within two years, while gasoline and diesel demand has already topped out. China won't stop importing oil. It still brings in roughly 11 million barrels a day, about 70% of what it consumes, up from less than three million a day 20 years ago. And overall oil consumption is likely to decline only gradually as China's demand for oil to make petrochemicals continues to grow. Nevertheless, Xi's campaign will have ramifications for global energy markets, with billions of dollars of Chinese oil imports projected to vanish in coming years. In June, the IEA, a Paris-based organization that tracks global oil consumption, slashed its forecast for Chinese demand in the 2028-30 period by more than one million barrels a day from its year-earlier prediction. Many oil-exporting nations are eager to retain a slice of China's market. Russia has been selling oil to China at a discount to ensure Beijing keeps buying. Saudi Arabia has invested in Chinese refineries to shore up long-term contracts to supply those facilities with oil. During a trip to Beijing in March, Saudi Aramco's chief executive lavished praise on China, telling Xi that China was 'inspirational and admirable" and 'an oasis of certainty" in an unpredictable world. The campaign has been costly for China's government. The Center for Strategic and International Studies in Washington pegged Chinese government support for electric vehicles at $231 billion from 2009 to 2023. Many of the nation's electric-vehicle makers are unprofitable. Overproduction has spurred a brutal price war at home, and rising EV exports that have fueled trade tensions. In late 2013, when China overtook the U.S. as the world's biggest net oil importer, its reliance on foreign crude looked set to grow unchecked, accounting for about half of global demand growth over the prior decade. Soon after, Xi gathered his economic team and told them China needed an energy 'revolution" to protect national security. Beijing was leery of relying too much on Middle Eastern oil, which had entangled the U.S. in that region's conflicts for decades. Xi also was facing domestic discontent over choking smog, attributable in part to the surging numbers of cars on China's roads. During the first Trump administration, as relations between the two nations deteriorated, Chinese government strategists grew concerned about the nation's reliance on the Strait of Malacca. Most of the ships importing oil and gas to China go through that narrow passage near Singapore, leaving them susceptible to intercept by the U.S. Navy in the event of a conflict. U.S. Deputy Secretary of Commerce Paul Dabbar has estimated that if China lost access to all seaborne oil-and-gas imports, its economy could shrink by as much as 17%. Xi's call for action ignited a flurry of government activity to boost its nascent EV industry. Not only would EVs help slash oil demand, they offered China a chance to leapfrog automakers in the U.S. and elsewhere after years of struggling to catch up to them in producing internal-combustion engines. To reduce the cost of EVs, Beijing exempted them from a 10% sales tax—a program estimated to have cost more than $100 billion since 2018. Nearly 500 companies sought to make EVs. Some were founded by executives with little experience running car companies, who burned through government money before flopping. By 2019, EVs and plug-in hybrids accounted for only a fraction of the market, with many Chinese consumers still hesitant to make the switch. The turning point came late that year when Tesla, with strong backing of Shanghai's government, opened its first factory in China. 'For the first time, Chinese consumers saw a really appealing, futuristic automobile," said Michael Dunne, chief executive of auto consulting firm Dunne Insights. 'It was good-looking, it was fast, it had all these highly attractive elements to a consumer." As EV sales surged, the government ramped up subsidies for companies to build public charging ports. It also required new apartment buildings to provide infrastructure enabling residents to easily install their own. As of May, China had more than 14 million charging points, nine times as many as at the end of 2020. The U.S., by comparison, has around 230,000 public and private chargers, in addition to hundreds of thousands at private homes that are more difficult to track. An EV charging station on display at the Auto Shanghai show in April. As of May, China had more than 14 million charging production line for electric-vehicle maker Zeekr in Ningbo, China. In recent years, sales of EVs have surged in China. In Shanghai, the city provided EV buyers with free green license plates while auctioning plates for traditional cars for more than $10,000. Cities replaced diesel-powered buses with electric ones. By 2023, more than 80% of China's city buses were all-electrics or hybrids. Chinese battery maker Contemporary Amperex Technology reported $18 billion in net profit over the last three years and invested more than $7 billion into research and development. Today, CATL and rival BYD say their R&D spending has enabled each of them to develop technology to charge cars in just five minutes. These days, China's EV factories are symbols of its manufacturing prowess. Less than 100 miles south of Tesla's Shanghai operation, Chinese carmaker Zeekr has automated entire processes such as welding, with more than 800 robots doing the work. One of its cars, the Zeekr 001, has a range of up to 466 miles—about 180 miles more than the median range of an EV in the U.S. Inside a showroom recently, a salesman voice-activated a massage function built into the driver's seat, while one of the car's apps played Chinese karaoke classics on a video screen. In the U.S., sales of EVs and hybrids have risen more slowly than in China, to 20% of light-vehicle sales at the end of last year, from 12% in early 2022, according to research firm Omdia. But high EV inventory levels at some dealerships suggest a limit to U.S. demand, and Congress is scrapping tax credits of up to $7,500 for EV purchases to save money for other priorities. China's desire for energy independence dates all the way back to former leader Mao Zedong, who once dispatched tens of thousands of workers to search for oil in China's northeast to ensure China wouldn't be dependent on imports. The discovery in 1959 of a massive deposit near the city of Daqing became the stuff of Communist Party lore, with 'Daqing Spirit" coming to mean hard work in the face of challenges. But production at Daqing and other fields couldn't keep up with the surge of demand following China's economic reforms. As the government prioritized EVs, state companies began cutting domestic oil output, preferring to import more of the crude they needed from less expensive sources abroad. In July 2018, Xi personally intervened, ordering state-owned companies to revive domestic production to safeguard national security. Three state-owned oil majors invested an additional $10 billion the following year in exploration and production. They zeroed in on offshore areas such as the South China Sea and the Bohai Sea off the country's northeast coast, as well as remote reserves near China's western border with Kyrgyzstan, in a region called the Tarim Basin. Cnooc, the company focused on offshore reserves, accelerated its drilling cycles to bring oil fields online more quickly. It teamed up with Chinese technology giant Huawei to digitize its operations, using tens of thousands of sensors to collect data and improve decision-making. By 2023, the Bohai oil field accounted for 50% of the growth in China's oil output. Cnooc also increased production in the South China Sea by more than a quarter since 2020. In that expanse of water off South China, the government has aggressively enforced disputed maritime claims against its neighbors. Cnooc said in a written statement that it aimed to raise its total oil-and-gas production as much as 15% between 2024 and 2027, and that two-thirds of its production would continue to come from China. In the deserts of the Tarim Basin crews are exploring some of the nation's deepest reserves. Summer temperatures can top 120 degrees, and in the winter they can hit minus 20. Such ultradeep exploration is expensive, with some wells costing three times as much as shallower traditional wells, a Chinese oil executive told state media. In 2023, Xi held a video call with Tarim Basin oil workers, praising their 'indispensable contributions" to the nation. About 5% of China's total oil and gas output last year came from the basin's deep reservoirs, a number Chinese oil executives intend to increase. As of May, PetroChina's parent company, China National Petroleum, said it had drilled 193 wells in the Tarim Oilfield at least 5 miles deep. In the U.S., many wells are a mile or two deep. In February, the company said it completed its deepest-ever exploratory well—the Shenditake 1—at nearly 7 miles deep. State media said it is the world's second-deepest vertical well, after a scientific well drilled by the Soviets many years ago. 'Advancing into the deep-Earth is the only path forward for the future development of oil and gas in our country," said PetroChina vice president He Jiangchuan. A sign greets workers at the gates of the drilling site. 'Challenge the forbidden zone to forge the tools of a great power," it said. 'Strive to become pillars of guaranteeing energy supply." Grace Zhu contributed to this article. Write to Brian Spegele at
Yahoo
2 days ago
- Business
- Yahoo
ExxonMobil negotiating return to Iraq's oilfields
ExxonMobil is reportedly in negotiations with Iraq to make a comeback to the nation's oilfields, according to a report by ZAWYA, citing state officials. This development comes just a year after the company withdrew from one of Iraq's largest producing fields. In 2024, ExxonMobil ceased operations at the West Qurna 1 oilfield in southern Iraq, transferring its responsibilities to PetroChina, which now holds the primary stake. This field is among the world's most significant oil reservoirs, with more than 20 billion barrels (bbbl) of proven crude deposits and a production rate of nearly 550,000 barrels per day (bpd). The company's decision to exit the West Qurna 1 oilfield followed its earlier departure from the Pirman gas block in Kurdistan, north Iraq. Oil Ministry Undersecretary Bassim Khudair was quoted as saying: 'ExxonMobil has conveyed its willingness to return to Iraq.' He further elaborated that the company is exploring new opportunities within Iraq's oilfields, indicating a growing interest from the US and other international companies in the Iraqi oil industry. Concurrently, discussions are ongoing with Chevron for development contracts in the Southern Nasiriyah oilfield and the Balad field in the North-Central Saladin governorate. Iraq is actively seeking foreign investment in its oil sector as the country aims to increase its crude output capacity by 50% to more than six million barrels per day by 2028. With approximately 145bbbl of oil reserves, the country is aiming to increase its reserves to more than 160bbbl through various development projects. In the past two years, Iraq has awarded nearly 30 contracts to companies such as TotalEnergies, BP and various Chinese operators in its fifth and sixth oil licensing rounds, with plans for another round this year. Recently, US-based HKN was awarded a contract to develop the Hamrin oilfield in the Northern Saladin governorate, with the goal of more than doubling its production. This field had been severely impacted by ISIS during conflict a decade ago. In related news, the State Oil Company of Azerbaijan Republic has entered into new agreements with ExxonMobil and BP for oil and gas exploration, aiming to maintain Azerbaijan's oil output at around 582,000bpd for the next five years with the support of Western energy investments. "ExxonMobil negotiating return to Iraq's oilfields" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Zawya
2 days ago
- Business
- Zawya
ExxonMobil seeks to return to Iraq's oilfields
ExxonMobil, the world's second largest oil company, is negotiating with Iraq to return to its oilfields just a year after it quit one of the Arab country's largest producing fields, Iraqi officials have revealed. In 2024, ExxonMobil exited the West Qurna 1 oilfield in southern Iraq and handed over its operations to PetroChina as the lead contractor. PetroChina now holds the main stake in the field, one of the world's largest oil reservoirs, containing more than 20 billion barrels of proven crude deposits and pumping nearly 550,000 barrels per day. The move came nearly two years after the oil giant decided to quit its sole remaining license in North Iraq—the Pirman gas block in Kurdistan. 'ExxonMobil has conveyed its willingness to return to Iraq,' Oil Ministry undersecretary Bassim Khudair said in a statement carried by Iraq's press on Thursday. 'The Company is currently in a stage of negotiations with Iraq for a new opportunity in the country's oilfields…these moves are a positive indication of growing interest in Iraq's oil industry by the US and other companies,' he added. Khudair also revealed talks are under way with the US' Chevron oil company for development contracts in the Southern Nasiriyah oilfield and Balad field in the North-Central Saladin governorate. He said Iraq's Oil Minister Hayan Abdel Ghani has been involved in the talks in Vienna but did not provide further details. Iraq, which controls the world's fifth largest recoverable crude deposits, has been locked in a drive to attract foreign firms into its oil sector as part of post-conflict plans to expand crude output capacity by 50 percent to over six million barrels per day in 2028. OPEC's second largest oil producer has awarded nearly 30 contracts over the past two years to France's TotalEnergies, BP and Chinese companies within oil licensing rounds 5 and 6. There are plans to hold a fresh licensing round this year. Last week, Iraq signed a memorandum of understanding with the US HKN to more than double the production of a Northern oilfield that had been devastated by the ISIS during the conflict 10 years ago. The Oil Ministry said the Texas-based Company has been awarded a contract to develop Hamrin oilfield in the Northern Saladin governorate. Iraq controls around 145 billion barrels of oil and hopes development projects will boost the reserves to more than 160 billion barrels. (Writing by Nadim Kawach; Editing by Anoop Menon) (
South China Morning Post
2 days ago
- Business
- South China Morning Post
Hong Kong stocks extend from 3-year high on China growth optimism
Hong Kong stocks kicked off the week's trading on a strong note on Monday, with the benchmark extending the gain from a three-year high on Friday as optimism about the resilience of China's growth and the risk-on mood in global stocks boosted sentiment. The Hang Seng Index rose 0.3 per cent to 24,899.49 as of 10.04am local time, heading for the highest close since January 21, 2022. The Hang Seng Tech Index gained 0.4 per cent. The city's financial markets opened for trading despite the aftermath of Typhoon Wipha on Sunday, which triggered the highest warning signal, injured dozens of people and halted flights. On the mainland, the CSI 300 Index climbed 0.3 per cent, and the Shanghai Composite Index added 0.4 per cent. Meituan rallied 4.2 per cent to HK$132.70, and Alibaba Group Holding gained 2.2 per cent to HK$118.30. PetroChina advanced 3.1 per cent to HK$4.48, and Sinopec added 3.2 per cent to HK$4.47. Investors moved on from uncertainty over tariff talks between the US and its global trading partners, as China reported faster-than-expected 5.3 per cent economic growth in the second quarter, aligning with its full-year growth target of around 5 per cent. US stocks closed at record highs last week, as the Goldilocks scenario took hold after official data showed robust retail sales and cooling inflation. China's central bank left the one-year and five-year prime loan rates unchanged for this month, indicating the economic recovery could still have legs.
Business Recorder
6 days ago
- Business
- Business Recorder
Qatar hikes September al-Shaheen crude term price to 5-month high, sources say
SINGAPORE: QatarEnergy raised the term price for al-Shaheen crude loading in September to $3.33 a barrel above Dubai quotes, sources said on Thursday, up 85 cents from the previous month and the highest in five months. The price hike came after spot premiums for Middle East crude rose so far this month, supported by robust margins, especially for diesel. The price was set after the producer sold five cargoes loading in the same month to PetroChina, Vitol and Japanese refiner Idemitsu Kosan via its monthly tender, the sources said. Separately, QatarEnergy also sold one September-loading Qatar Marine and Land crude each to PTT at premiums between $2.20 and $2.30 a barrel above Dubai quotes, they added.
