China reports major offshore oil find
The Associated Press
Published: March 28, 2007
BEIJING: China has found a huge offshore oil field that could become the energy-hungry country's biggest new oil source in a decade, a state news agency said Wednesday.
The scale of the discovery, if confirmed, would be welcome news to Beijing, which is struggling to reduce reliance on oil imports to fuel its booming economy. China is the world's No. 2 oil consumer behind the United States and its oil imports rose 14.5 percent last year.
PetroChina, which found the field in Bohai Bay off China's east coast, estimated its reserves at 2.2 billion barrels, the Xinhua news agency said, citing unidentified company sources.
"The newly found oil field is the largest China has discovered over the past 10 years," the Xinhua report said.
PetroChina, China's biggest oil company, said last week that it had found a new oil field in Bohai Bay but gave no details. PetroChina spokesmen refused Wednesday to release any information.
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If the reported size is accurate, "China will have added a valuable upstream asset that can rival the country's leading oil production centers in the future," Steven Knell, an energy analyst for the consulting firm Global Insight, wrote in a report to clients.
Despite its size, it was unclear how the field would affect China's need for imports. Daily production could reach 200,000 barrels within three years, Xinhua said. But that still would be equal to just a fraction of China's imports of 2.9 million barrels per day.
China met its oil needs from domestic fields until the late 1990s, when it became a net importer. Demand is rising by about 7 percent a year, but domestic production in 2006 rose by just 1.7 percent. Imports accounted for 47 percent of consumption last year.
Economists say Chinese oil demand, driven by blistering economic growth that reached 10.7 percent in 2006, has strained world supplies and pushed up prices.
The biggest recent domestic oil discovery, also made by PetroChina, was a field found in the mid-1990s in the Tarim Basin in China's desert northwest.
Chinese oil companies have been spending heavily on exploration in the northwestern and coastal areas, but results have been disappointing.
Elsewhere, state oil companies have spent billions of dollars to gain access to oil and gas supplies in Central Asia and Africa.
State-run Korea Oil has agreed to team up with Asia's biggest oil producer, China National Petroleum, to cooperate in the hunt for overseas resources, South Korean officials said Wednesday, Reuters reported from Seoul.
The informal link between China and South Korea, Asia's major energy consumers, will give both countries a competitive edge over major oil companies in securing stakes in oil and gas fields, the Energy Ministry said.
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