Page 8 - AsianOil Week 30

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CNPC’s production plans
The state-owned Chinese energy giant is investing in new upstream ventures both at home and abroad
COMMENTARY
WHAT:
What: CNPC has unveiled an overseas oil and gas production target of 2mn boepd for 2020.
WHY:
Why: The company must invest in overseas oil and gas assets as domestic upstream potential remains limited.
WHAT NEXT:
What next: CNPC has decided to team up with Sinopec on the domestic front in a bid to boost output.
STATE-OWNED China National Petroleum Corp. (CNPC) is being forced to plan for the future as China’s domestic oil and gas demand outpaces domestic production capacity.
On the international front the company is looking to continue developing its portfolio of assets, while it has also agreed to the unusual move of teaming up with traditional state-rival Sinopec to enhance production and reserves across three basins.
e company is responding to Chinese Presi- dent Xi Jinping’s 2018 call to the state majors that more be done to boost output.
Production targets
CNPC has set a production target of more than 2mn barrels oil equivalent per day (boepd) from overseas oil and gas operations in 2020, the com- pany said on July 30. e company operates 92 oil and gas projects in 34 countries, covering Central Asia, Russia, the Middle East, Africa, the Americas and Asia-Paci c.
e company’s overseas equity production amounted to slightly less than 2mn boepd in 2018. CNCP did not provide a 2019 production forecast. e company’s 2020 target may be on the conservative side, however, given that its overseas output rose by 10% year on year in the rst quarter to 26.09mn tonnes of oil equivalent (2.12mn boepd). The company said the pro- duction growth was the result of e orts to lower costs and increase e ciency.
CNPC said that it would expand co-oper- ation with foreign partners in risky domestic
exploration plays as well as in tapping uncon- ventional resources. It added that it had set a 2020 production target of 12mn tonnes of oil equivalent (240,000 boepd) from its joint oper- ating blocks. e company also aims to boost its global oil and gas trade to 550mn tonnes (11mn boepd) in 2020, up from 480mn tonnes (9.6mn boepd) in 2018.
China’s majors are looking increasingly to the overseas market to boost production in the wake of rising oil demand and limited domes- tic crude prospects.
Limited performance
China has produced an average of 3.86mn bpd of oil in the rst half of this year, up marginally from 3.79mn bpd in the rst half of last year. Oil imports averaged 9.92mn bpd in the first six months of this year, up from 9.1mn bpd in the same period of 2018.
At the same time, China’s demand for natural gas keeps growing at a faster pace than produc- tion. Consumption surged 18.1% last year to reach 280.30bn cubic metres, while production expanded by 8.8% to 161 bcm. CNPC has fore- cast that output will expand by 6% this year to 170.8 bcm, while demand will increase by 10% to 308 bcm. is will push the country’s reliance on gas imports to nearly 45% this year. China’s oil import dependence has already topped 70%, according to CNPC chairman Wang Yilin.
Despite the government’s call on the state majors to up oil production to safeguard the country’s strategic interests, the country is
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China's crude balance
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w w w . N E W S B A S E . c o m Week 30 31•July•2019
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