China unites oil giants to boost domestic production under Xi's directive
Giants CNPC, Sinopec, and seven other state-owned Chinese oil companies are set to collaborate under a new state body tasked with increasing oil and gas production in China. This move follows a directive from the country's leader, Xi Jinping.
8:08 AM EDT, July 1, 2024
According to Reuters, China is the world's largest crude oil importer, meeting nearly three-quarters of its energy needs through imports. However, to maintain domestic crude oil production levels exceeding 4 million barrels per day, which is essential for powering manufacturing activities and military services, China is investing billions of dollars.
Because of that, China decided to establish a new state entity. Its main objective will be to bring together domestic oil producers and other state-owned companies.
New drills
The newly established unit will be responsible for exploring very deep oil and gas deposits and extracting more difficult-to-exploit unconventional resources, the state-owned energy group CNPC stated on Monday.
Reuters reports that this decision is a response to President Xi Jinping's call for the energy sector to create "new productive forces" that will contribute to increasing the country's energy security.
Joining forces
The state oil companies, which will play a crucial role in this process, will be tasked with exploiting deep onshore drills and accelerating the development of offshore oil fields. These efforts aim to increase oil production, which has grown by 2% annually since 2018.
China is expanding its gas capacities. Oil and gas giant CNOOC is accelerating work in the South China Sea region. It plans to develop the deposits there, where resources are estimated to be as much as 35 trillion cubic feet. Gas production is expected to be ready as early as 2025.
As reported by money.pl, China has also been working on increasing shale gas production for years. It holds the most significant global deposits, estimated at around 1,300 trillion cubic feet.
Among the companies that will play a crucial role in this process are the country's two dominant oil and gas producers—CNPC and Sinopec. However, the newly created entity will include seven other states: China Aerospace Science and Industry Corp, steel group Baowu, equipment manufacturer Sinomach, Dongfang Electric Group, and Minmetals.
