Business opportunities within Chinas petroleum sector
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Business opportunities within Chinas petroleum sector
- 1. China’s Petroleum Sector Asia Days 2013, 11 June, Grimstad Knut Roald Sørlie Ivar Moesman
- 2. Content 1. The Big Picture 2. Resources & Potential 3. Chinese National Oil Companies (NOCs) 4. Opportunities and barriers
- 3. Content 1. The Big Picture 2. Resources & Potential 3. Chinese National Oil Companies (NOCs) 4. Opportunities and barriers
- 4. Source: BP’s Statistical Review of World Energy data 1. The Big Picture 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 5. • Oil, 2011 INTSOK, CIA Factbook (2009 – 2011) • Natural Gas, 2011 China no. 11China no. 7China no. 4 China no. 2China no. 5China no. 2 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 6. 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 7. 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 8. Market trends • 50% of the global increase in demand over the next 20 years is predicted to come from China • 60% of China's oil consumption will be imported by 2020 • Past 10 years: 53% of China’s increased oil and gas output came from the offshore sector. 2012: Increased to 85% • 800–1.000 bill. Yuan ($121-151 billion) will be invested in the offshore industry during the 12th Five-Year Plan (2011-2015) • Offshore: 35% of world production. Deep water 2002-2012: 3%-10%. After 2012, deep water is the only sector to growth • Bad shipbuilding market creates a shift towards offshore sector Sources: IEA, World Energy Outlook, energy files, Agility Group 35% 65%
- 9. 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 10. Source: IEA 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 11. Content 1. The Big Picture 2. Resources & Potential 3. Chinese National Oil Companies (NOCs) 4. Opportunities and barriers
- 12. Sources: IEA / PetroChina LNG Terminal 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects 2. Resources & Potential
- 13. Qaidam Basin Sichuan Dadang Ordos Shengli Zhongyuan Jiangsu Liaohe Sources: CERA / INTSOK / EEE Reporter/Wikipedia 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 14. Source: CNOOOC, BBC, RT News Just one problem… 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 15. Source: www.offshore.technology.com, CNOOOC … that can be avoided 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects Statoil (75 %) / CNOOC (25 %), 1997-2009
- 16. Haiyang Shiyou (“Marine Oil”) 981 – with Norwegian technology 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects Source: www.chinesedefence.com / CNOOOC
- 17. Norwegian companies in China with relevance to oils & gas 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 18. Content 1. The Big Picture 2. Resources & Potential 3. Chinese National Oil Companies (NOCs) 4. Opportunities and barriers
- 19. 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects 3. Companies China National Petroleum Corporation (CNPC) China Petroleum and Chemical Corporation (Sinopec) China National Offshore Oil Corporation (CNOOC) PetroChina China National Oil and Gas Exploration and Development Corporation (CNODC) Sinopec Corp. CNOOC Ltd. CNOOC Offshore Oil Engineering Ltd. China BlueChemicals Co., Ltd China Oilfield Services Ltd. Sinochem Zhenhua Oil Yanchang CITIC resources The 4 minor NOCs Source: INTSOK, Wikipedia Domestic E&P Overseas E&P Sinopec Int. Petroleum Explration and Production Corp. (SIPC) Overseas E&P
- 20. Sources: CERA / INTSOK / EEE Reporter/Wikipedia CNOOC Upstream offshore Sinopec Downstream CNPC/PetroChina Upstream onshore 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects
- 21. Content 1. The Big Picture 2. Resources & Potential 3. Chinese National Oil Companies (NOCs) 4. Opportunities and barriers
- 22. 1. Goals of Chinese NOCs: Fill the demand-supply gap! Supply energy to continue the economic expansion and modernization of mother China. • Diversify sources of supply • Increase reserves • Increase production capabilities • Become integrated energy companies o Energy collected from international activities o Integration across value chain o Job creation o Spin-offs to domestic sectors – domestic demand for related goods o Global stature o Not just ST profits to shareholders
- 23. 2. Opportunities 2.1 Upgrading Chinese technical capabilities The Chinese NOCs have had limited experience outside of their historical focus areas in China’s domestic oil and gas sector, which is a problem for them as they go overseas into new areas and expand domestically. Chinese companies need to acquire technology and to learn from foreign companies. • Upstream deepwater • Equipment; design; engineering; construction; services; standards, practices & regulation; management • Currently China imports 70% offshore-related equipment • LNG • LNG Equipment; Bunkering & Ship to Ship Transfer; Regasification solutions; Small Scale LNG; Rules, Standards & Regulations/ Risk Management; Maritime Technologies • Shale Gas Limited opportunities China wants to protect its own industry from competition domestically, within areas where the NOCs have experience: Chinese NOCs run shallow water offshore and traditional onshore alone
- 24. 1. China’s petroleum appetite continues to grow 2. China wants to narrow the demand/production gap 3. Acquires technology from foreign companies a. NOCs invites foreign companies on shale gas and –oil and deep water offshore 4. … and protect its own industry from competition domestically a. Chinese NOCs run shallow water offshore and traditional onshore alone 5. Shale gas, CCS / CCUS revolution 6. New shipping routes (LNG)? 7. China’s NOCs continue to “go abroad” a. Acquire technology from the West b. … and utilize it domestically and in Africa Source: Worldoil.com Source: www.freeworldmaps.net Technology
- 25. History of offshore rig construction • Can China Offshore repeat what was achieved in shipbuilding? What can China learn from Korea and Sinpgapore? Global Offshore Drilling Rig Order book (Sept. 2012) by Shipyards’ countries by owners’ countries Sources: ODS Petrodata, Agility Group 12th 5yr-Plan 20% 2015 USA, Eur. Korea, Singapore China? 48 43 27 13 11 6 6 6 5 5 5 4 3 2 2 1 1 0 10 20 30 40 50 60 Total (188 units / 17 countries) 32% Norwegian owners
- 27. Example: Chinese Offshore Shipyards, lack and limited experience creates opportunity Design & engineering, limited experience • Concept and Basic design: Underestimate the importance of detailed engineering • Limited rig operation experience • Underestimate the interface engineering Fabrication & Construction, lack of experience • Apply shipbuilding experience into offshore construction • Lack of proper Project Management, Planning and Weight Control, et al • Lack of qualified and experienced work forces • Lack of qualified subcontractors and Commissioning experience Standards and Practices, lack of experience • Not familiar with relevant Class’ rules and regulation: Norsok Standard • Limited experience with offshore equipment and procurement practice • Lack of offshore QA/QC/DC standards and practice • Chinese shipyard’s organization and management style: “Project Manager has no control of manpower, money and facilities” 2.2 Cheaper production China will be one of the biggest markets for offshore rig and equipment and Norway needs to build new equipment, high quality, low price for deployment in the North Sea.
- 28. Barriers and possible resolutions • Complexity on procurement and decision making procedures; Business culture and language barrier • Cope with increasing local content requirements • New market entrants have low visibility at the beginning and find difficulty in establishing trust with local companies Establish local entity and engage the right local managers with strong understanding of major local players Market synergistic offerings by teaming up with other Norwegian companies • Importance of personal relationship and networking Demonstrate long term local presence and ambitions in China • Norwegian companies are perceived as having high knowledge base but are very costly Offer good after sales services Focus on targeting areas where Norwegian companies have a head-start in compared to other companies e.g. LNG fuelled ships • Offshore especially: Political situation ?
- 29. 1. The Big Picture 2. Resources & Potential 3. Authorities & Companies 4. Trends and future prospects INTSOK China Office c/o Det Norske Veritas (DNV) 9th Floor,Tower C, Office Park, No.5 Jinghua South Street Chaoyang District Beijing 100020, China Jian Guo (Jason), Oil and Gas Advisor jian.guo@intsok.com Innovation Norge China Office Royal Norwegian Consulate General, Shanghai, Commercial Section Rm. 1701, Bund Center No. 222 East Yan’an Road, Huangpu District Shanghai 200002, People’s Republic of China Ivar Moesman, Market adviser Ivar.haugen.moesman@innovasjonnorge.no Telephone: +86 216 3290 498
Notas del editor
- Staoil,intsok, DNV, kværner,
- First of all, to put things in perspective: Coal has long been, is, and will remain China’s most important source of energy in the foreseeable future – primarily for power production and heating. China has the world’s largest coal reserves, and intends to use them for China’s continued economic growth. Because of growing concerns with local pollution and obvious limitations with regards to utilization of coal for transport, the petroleum sector is however growing rapidly.Coal and oil increaseing most.China will double energy needs within 2020
- OilAs the figure shows, and as I’m sure you already know; China is the world’s second largest oil consumer after the US.Many don’t think of China as a big oil producer, when in fact it is as big as Iran. The difference is of course that China consumes most of its own oil, and imports even more.… that you can see here. The numbers here are from 2011. Unconfirmed numbers from December 2012 show that China’s oil import may already have surpassed the US’ (because of increase in China’s demand and increase in US production). China’s oil export in 2011 was less than 10 % of the production, which is around the same volume as the very moderate oil export from countries like Italy, Germany and France.Natural gasAlthough natural gas consumption in China is not as significant as the oil consumption, it is increasing. -Especially in the big cities, where there is a growing concern about air pollution caused by (a.o.) coal combustion, more and more is converted to natural gas.China’s own natural gas production is in fact lower than Norway’s(!), and it almost matches the domestic consumption.Thus, the relative net gas deficit (import) is much lower than for oil, making China a relatively small natural gas importer (no. 11 in the world). The key question however, is whether China’s own production will keep up with the increase in domestic demand? We don’t think so, and China will most likely become the second largest importer of gas/LNG.China is nr. 1 and nr. 2… numbers are 2011. In 2012 China is nr 1 oil import, due to shale gass increase in usa.Gass= CH *= ca. norway in terms of production.
- Although China’s oil production increases, the consumption increases much more. From being a net exporter in the early 1990s, China currently imports more than half its consumption, which of course is a problem, economically and with regards to national security. The Chinese government is very aware of this, and is working to deal with it.Økende gap, need import == business possibiliities and increased trade
- Although China’s oil production increases, the consumption increases much more. From being a net exporter in the early 1990s, China currently imports more than half its consumption, which of course is a problem, economically and with regards to national security. The Chinese government is very aware of this, and is working to deal with it.Økende gap, need import == business possibiliities and increased trade
- The trend for natural gas is the same as for oil – only 10 years delayed.IvarTurning point in 2007
- Around half of China’s oil import is from the Middle East, while Africa – especially Angola – is a fast growing source. This is of course linked to China’s strategic relationship with many African countries (leaders), where China is allowed to invest in their own production facilities in exchange for local infrastructure. The strategic partnerships in Africa also represent ways for Chinese NOCs to expand their international presence and experience.As mentioned before; LNG and natural gas is becoming relatively more important in China, as in the rest of the world. From 2010 – 2011, the annual LNG import grew more than 30 %(!), while the oil import grew «only» 6 %. Even so, the energy equivalent of China’s LNG import 2011 was a relatively small proportion of the oil import (ca. 9 %).Ivar – top 3Oil: S arab, russian, etc.Gas: Austr, indonesia etc.
- Roughly 92 % of Chinese crude import is by Ocean shipping, of which 75 % is shipped by foreign vessels to China. The remaining 8 % is by pipelines and railways from Russia and Kazakhstan.A staggering 83 % is currently transported through the Malacca strait! The planned oil & gas pipeline from harbor in Myanmar to China is a step toward reduced dependency on the Malacca strait.Needless to say, China is trying to reduce its dependency on its both its neighbors and “rouge countries” in the Middle-East, by diversifying its trading partners and developing its own production.IvarOljeoggass:Nord frarusslandVest frakhasakstanBurma: Naturgass – finaliseres I sluttenav 2013Mallaca: 83% avoljekommerfra SKIP. Kina ønsker at mestepartenavdetteskalfraktes med Kinesiskeflåte. Overføringfrautenlandsketilkinesiskebåter.Kina eravhengingavøkt import --- building pipelines north and west..
- Let’s move on to talk more about China’s own resources and the potential for future development. The infrastructure is of course an important factor.As mentioned on the previous slide, part of China’s crude import (ca. 8 %) is through pipes from Russia and Kazakhstan. By now, China has an extensive infrastructure for oil and gas: Around 40 000 km onshore pipelines, more than 3 000 km subsea pipelines, several LNG terminals – and increasing.Although more and more and more import is imported via pipelines from neighboring countries, such as Myanmar, shipping will remain the most important way of transportation.Ivar80% Tianjing (sør for Beijing)IM Skaugeneksperterpå RE-gassification. IM Skaugener med pådenneprosjektet.LNG – renere--- alternativ
- After 50 years of production, China has enough experience with conventional on-shore oil & gas. Thus, this market is virtually closed to foreign companies. The situation is different when it comes to LNG, deepwater off-shore and unconventional on-shore (shale gas/oil, oil sands), where Chinese companies don’t have the needed technology. Thus, there is a big and growing market for international companies to explore and develop production. A relevant question to ask, though, before entering projects in China is; “how long does it take before your technology has been fully acquired by Chinese companies?”.As you saw in a previous slide, there is no Chinese petroleum import from North America. Instead, Chinese NOCs are acquiring unconventional oil & gas expertise and technology in Canada and the US, in order to apply them in China: In 2012/2013, CNOOC bought Canada’s Nexen Energy for a staggering US$15.1 billion(!), 130 % more than the company’s value according to other potential buyers. By critics, the purchase was seen as a strategic and politically motivated act from the Chinese government as the puppet master, rather a reasonable acquisition from a commercial company. According to the US Energy Information Administration EIA, China has the world’s largest reserves of technically recoverable shale gas, almost 50 % more than the US(!). PetroChina and Shell is currently exploring China’s first shale gas project in the Sichuan basin.The offshore oil/gas industry in China is also developing fast. The Yellow sea, the East China Sea, but especially the South China Sea, are believed to contain big oil & gas reserves. With depths from 300 – 4,000 meters, Chinese companies cannot develop the petroleum sector in South China Sea alone, which opens up for foreign operators and service companies.IvarResources in Chinabassenger: Basins = rundingene: OljeoggassSichuan = Shalegass = skifergassNorgeharikkenoe å gjørepålandjord. Interessanteområdet: Dyptvann.
- However, because of China’s territorial disputes with neighboring countries (in particular Vietnam, Philippines & Japan), there is little accessible and reliable info about the offshore reserves.Just an example: In June 2012, Chinese National Oil Company (NOC) CNOOC published this notification about development of blocks in the South China Sea (SCS). Unsurprisingly, it sparked protests from Vietnamese people and government. Interestingly, China’s claim was that this is an undisputable territory, to which Vietnam’s answer was “Yes indeed, it’s ours!”. It is flawed to see Chinese territorial claims in the SCS as just expressions of economic interests. Regardless of resources, China always prioritizes protection of what it regards as its own territories, and to have buffer zones against what it sees as possible threats from the outside world. So, it also goes the other way: Petroleum resources in SCS represent an opportunity to build up its own presence and infrastructure, and thus safeguard China’s territorial interests. -If only companies will take the bate… Of course; a good advice to any company is to avoid disputed territories.C
- There are of course already several fields being developed in undisputed Chinese offshore territories in SCS, many of them in cooperation with foreign companies. In fact, Statoil’s (StatoilHydro) first foreign operatorship (75%) (Lufeng 22-1) was conducted together with CNOOC (25 %) in SCS, from 1997 until shut-down in 2009.But of course, now we have other other problems (bilateral relationship)…
- Another example of success is this one – HaiyangShiyou 981; China’s first deep-water semi-submersible rig for deep-water drilling in the South China Sea. The installation was put into operation summer 2012 and can reach water depth of 3,000 meters. Although it was built in Chinese docks, ca. 70 % of the technology is Norwegian and well known from the North Sea.IvarNorskborepakkerogvinsjer.
- Here are the Norwegian companies currently present in the Chinese petroleum market – in one way or another.Kongsberg Oil & Gas Technologies: Specialized in subsea engineering, technology development, data management, simulation etc.Jotun Coatings: Self-explanatory. Have 18 offices and factories all over China.DNV : Specialized in certification and risk management. Offices in Beijing and ShanghaiAker Soutions: Specialized in drilling technologies, subsea operations, loading systems, maintenance etc. and a variety of engineering services. Offices in Beijing, Shanghai, Shenzhen and YichangKværner: Specialized in floating platforms, concrete substructures and LNG-facilities etc. Office in Beijing.Imenco: Specialized in subsea cameras, electronics, tooling & equipment and helicopter refueling systems etc. No offices in China.Clampon: Specialized on sub-sea corrosion-erosion monitoring. No offices in China.Statoil: Have office in BeijiingAgility Group: Former Grenland Group. Specialized on semi-submersible rigs. Have offices in Beijing and Shanghai.Nexans: Although this is a French company, cables from Halden, Norway, are used in Chinese sub-sea installations.Underleverandørerkanhekte seFMC = Amerikansk = spinn off frakongsberg… myenorskutvikletteknologi. Ernåkonkurrenttilaker solutions
- There are three major state owned enterprises (SOE) one should notice in China’s petroleum sector, often referred to as the National Oil Companies (NOC). All three are 100 % state-owned and are big conglomerates, with a wide range of activities and subsidiary companies that cover the whole value chain upstream and downstream. Including subsidiaries, the biggest, CNPC, has more than 1½ million employees. The smallest of the three, CNOOC, that has also been mentioned on previous slides, has around 100,000 employees, while Sinopec has 350-400,000 employees.All state owned companies report to SASAC, which is a ministry under the State Council (government). Of other ministries involved in petroleum, especially Ministry of Land and Resources (MLR) and the “Super Ministry” NDRC are worth taking notice of. NDRC is called the “Super Ministry” because virtually all decisions made in State Council goes through NDRC for clarification and to oversee correct implementation in the other ministries. As the authority on licenses for search and drilling, MLR is also very important. Of course, there are also others that play important parts that are not shown here, such as Ministry of Environmental Protection (MEP) and Ministry of Commerce (MOFCOM).All ministries are represented in what is called State Council, which is the closest thing to what we would call the government in Europe. Since this is not a seminar on political science, I’ll skip the details about The Central Committee, The Politbureau, its standing committee and other interesting features of the Chinese government.Important to note, though, is of course that The Communist Party of China is the undisputable authority above all and that all CEOs and deputies in state owned enterprises are appointed directly by The Party’s Central Organization Department(!).The big NOCs have majority ownership in several subsidiaries that are listed on stock markets in Shanghai, Hong Kong, London, New York etc. China’s commercial presence in the outside world is through these companies. According to Wikipedia, CNPC’s subsidiaryPetroChina is the world’s third largest company (2012) in terms of market capitalization (after Exxon Mobil and Apple). As a general rule, CNPC’s business in mainland China is run through PetroChina, while the overseas market is handled by CNODC.IVARSINOPEC = DOWNstream.. Bensinstasjoner etc.CNOOC = mestinteressant for Norge.SASAC = ministeriesomstyrerallestatseide firma.Ministry of land and reso = lisenserNational Development and Reform Commission = State coucil = regjeringenPartiet = pekerutallesjefer I regneringen, ledere I statsselskapene etc.Aker solutions work with= CNOOC Offshore Oil Engineering Ltd.
- There are three major state owned enterprises (SOE) one should notice in China’s petroleum sector, often referred to as the National Oil Companies (NOC). All three are 100 % state-owned and are big conglomerates, with a wide range of activities and subsidiary companies that cover the whole value chain upstream and downstream. Including subsidiaries, the biggest, CNPC, has more than 1½ million employees. The smallest of the three, CNOOC, that has also been mentioned on previous slides, has around 100,000 employees, while Sinopec has 350-400,000 employees.All state owned companies report to SASAC, which is a ministry under the State Council (government). Of other ministries involved in petroleum, especially Ministry of Land and Resources (MLR) and the “Super Ministry” NDRC are worth taking notice of. NDRC is called the “Super Ministry” because virtually all decisions made in State Council goes through NDRC for clarification and to oversee correct implementation in the other ministries. As the authority on licenses for search and drilling, MLR is also very important. Of course, there are also others that play important parts that are not shown here, such as Ministry of Environmental Protection (MEP) and Ministry of Commerce (MOFCOM).All ministries are represented in what is called State Council, which is the closest thing to what we would call the government in Europe. Since this is not a seminar on political science, I’ll skip the details about The Central Committee, The Politbureau, its standing committee and other interesting features of the Chinese government.Important to note, though, is of course that The Communist Party of China is the undisputable authority above all and that all CEOs and deputies in state owned enterprises are appointed directly by The Party’s Central Organization Department(!).The big NOCs have majority ownership in several subsidiaries that are listed on stock markets in Shanghai, Hong Kong, London, New York etc. China’s commercial presence in the outside world is through these companies. According to Wikipedia, CNPC’s subsidiaryPetroChina is the world’s third largest company (2012) in terms of market capitalization (after Exxon Mobil and Apple). As a general rule, CNPC’s business in mainland China is run through PetroChina, while the overseas market is handled by CNODC.IVARSINOPEC = DOWNstream.. Bensinstasjoner etc.CNOOC = mestinteressant for Norge.SASAC = ministeriesomstyrerallestatseide firma.Ministry of land and reso = lisenserNational Development and Reform Commission = State coucil = regjeringenPartiet = pekerutallesjefer I regneringen, ledere I statsselskapene etc.Aker solutions work with= CNOOC Offshore Oil Engineering Ltd.
- Initially, the 3 big NOCs were set up to divide the Chinese market in three as seen on this picture.However, after China turned away from the Soviet style planned economy in the 1980s, this has changed. Now, the Chinese government wants to see competition between the three, and as a consequence there are many overlapping interests. But of course; the past naturally forms the present, and CNOOC is still virtually the only Chinese NOC in the offshore petroleum industry. Sinopec and CNPC are more in direct competition on land. On upstream activities (drilling) CNPC seems to be the winner of this competition, which has forced Sinopec to focus more on downstream activities (refineries, gas stations etc.). For the typical car driver, Sinopec may seem to be the biggest oil company in China, followed by CNPC, while it is in fact quite the opposite. These companies of course also have interests outside China (next slide…)IvarCNPC starts to do offshore now etc… this map is not correct
- I would have liked to show you an updated version of this figure. But as you see, this is from 2009 and no longer valid. For instance; CNOOC’s controversial acquisition of Nexen Energy ($15.1 Bn) in Canada that I mentioned earlier, is not included. Also; Especially in Africa, there a many acquisitions that are not visible in this map.Interestingly though, CNOOC’s purchase of Norwegian Awilco Offshore ($2.5 Bn in 2007) is included. As you probably know, Awilco later changed name to COSL Drilling Europe and is part of China Oilfield Services Ltd (COSL) that is a subsidiary or CNOOC. They currently have several contracts with Statoil in the North Sea.
- Since Jiang Zemin’s lateleadership in 1999, China has had a public strategy of “going out” or “going global” that has ever since been supported by the government. But it is really only the last 10 years that Chinese companies have made a big global impact. The increasing Chinese ODIs are targeted more and more on natural resources – to support its own industry. And as this figure shows, energy is the biggest of all. It is of course the 3 big NOCs that drive this development.ivarNOT IMPORTANT SLIDE
- Through its flagships, CNPC, CNOOC and Sinopec, China is targeting the world as major commercial player – with political support from its government. This gives Chinese NOCs an advantage over their foreign rivals: It is easier to negotiate with authorities and acquire drilling licenses etc., when Chinese politicians on board can instruct other Chinese state owned companies (SOE) to contribute with building of infrastructure (roads, stadiums and housing) – with Chinese labor.
- And as you can see here, Chinese NOCs production in foreign countries is increasing rapidly. This production volume is not available on the international market…
- In November 2012, the first LNG tanker ("Ob River“) through the Northeast Passage went from Melkøya in Norway to Japan. With continuing melting of Arctic ice, this passage is likely to become increasingly more important. Which of course is good for Norwegian business.ivarCa. 1/3 kortere
- Technology DriversTechnology drivers refer to factors that help the Chinese NOCs to build up technical capabilities. Historically, the Chinese NOCs were given a part of the domestic oil and gas value chain to focus on: CNPC focused on the upstream onshore sector, Sinopec focused on downstream and CNOOC focused on the upstream offshore. This implies that the Chinese NOCs have had limited experience outside of their historical focus areas in China’s domestic oil and gas sector, which is a problem for them as they go overseas. Given the scarcity of resources globally, the NOCs want to acquire capabilities to be involved in different oil and gas plays. Technology capabilities that Chinese NOCs want but lack include:LNG Upstream deepwaterUnconventional resources (coal bed methane (CBM), oil sands) Downstream and petrochemicals
- In November 2012, the first LNG tanker ("Ob River“) through the Northeast Passage went from Melkøya in Norway to Japan. With continuing melting of Arctic ice, this passage is likely to become increasingly more important. Which of course is good for Norwegian business.ivarCa. 1/3 kortere
- Technology DriversTechnology drivers refer to factors that help the Chinese NOCs to build up technical capabilities. Historically, the Chinese NOCs were given a part of the domestic oil and gas value chain to focus on: CNPC focused on the upstream onshore sector, Sinopec focused on downstream and CNOOC focused on the upstream offshore. This implies that the Chinese NOCs have had limited experience outside of their historical focus areas in China’s domestic oil and gas sector, which is a problem for them as they go overseas. Given the scarcity of resources globally, the NOCs want to acquire capabilities to be involved in different oil and gas plays. Technology capabilities that Chinese NOCs want but lack include:LNG Upstream deepwaterUnconventional resources (coal bed methane (CBM), oil sands) Downstream and petrochemicals
- This is partly a summary of what has already been said, that I will try to use to describe the future:This is not a very bold statement, one that everybody agrees on.Another rather obvious result of the first statement. China will try to increase its own production, to reduces its dependency on others.China seems less concerned with its dependency on foreign technology to develop its own production – for one obvious reason; it can be copied. This is however the framework for all foreign business in China: It is an enormous and growing market if you have state of the art technology. And if you are able to protect it and/or are able to stay constantly 5-10 years ahead of those who try to copy, you can make a huge success in China.… but don’t expect to be able to compete on price with Chinese companies that can supply the same technology for traditional recovery. You have to offer something extraordinary.Unconventional oil and gas will become a huge market in China: One in which Chinese companies simply cannot compete with American/European companies for oil and gas recovery technology, and thus has great opportunities for foreign companies. The same is true for deep-water offshore, although not in the same scale when it comes to volumes. CCS in China is referred to as CCUS, where U is for utilization. It is thus regarded as a possible way of enabling more utilization of oil and gas, rather than a way of reducing CO2-emmissions.CNOOC controlls ca. 97% of all licences .. Ie foreigners ca. 3%
- As Chinese companies continues to invest abroad, this “technology leakage” is likely to continue. Although it is tempting to try to stop it, the only alternative then is to not enter the Chinese market – which to many western companies may be an even greater loss.As a result of Chinese NOC’s strategies (and approval from State Council) to go abroad, the competition over African natural resources, such as oil, is notably fiercer and increasing. This in itself is of course a good thing for African countries, if it could only benefit the people and not just the political elite… After suffering great losses in Libya, after the fall of Muammar Gaddafi in 2011, Chinese NOCs and the Chinese government may already be preparing to deal differently with rioting and open discontent in African countries, to protect their own investments. Only time will show how this plays out.No companiesFocus on offshoreConnect to norwegiansupplimentary companiesNiche products in offshore that chinese are interested in. China needs this to get the deep water oil and gass from deep sea.IN till now has not focussed on oil and gas. IN is not so engaged. INTSOK= matchmaking, not so much counselling as IN.Maritme offshore = approaching oil and gass… supply vessels etc.Contact infoIvarKnutJason
- Technology DriversTechnology drivers refer to factors that help the Chinese NOCs to build up technical capabilities. Historically, the Chinese NOCs were given a part of the domestic oil and gas value chain to focus on: CNPC focused on the upstream onshore sector, Sinopec focused on downstream and CNOOC focused on the upstream offshore. This implies that the Chinese NOCs have had limited experience outside of their historical focus areas in China’s domestic oil and gas sector, which is a problem for them as they go overseas. Given the scarcity of resources globally, the NOCs want to acquire capabilities to be involved in different oil and gas plays. Technology capabilities that Chinese NOCs want but lack include:LNG Upstream deepwaterUnconventional resources (coal bed methane (CBM), oil sands) Downstream and petrochemicals
- Chinese yards lack offshore engineering experience and they are eager to look for a cooperative partners to develop the offshore industry