April 16 – China announced that value-added tax on gasoline and diesel imported by China National Petroleum Corporation (CNPC) and China Petrochemical Corporation (Sinopec) between April 1 and June 30 will qualify for a 17 percent tax refund in the second quarter. The move aims to relieve CNPC and Sinopec’s refining loses and ensures that the local market is supplied with adequate refined oil products.

“The tax rebate will reduce the refining losses of CNPC and Sinopec to some extent,” Zheng Zhiguo, an energy analyst with Shenyin Wanguo Securities told China Daily, “But the amount is small and cannot fully cover the losses.”

The Ministry of Finance detailed that CNPC tax imports on 500,000 tons of gasoline and one million tons of diesel will be refunded as well as Sinopec’s imports of 500,000 tons of gasoline and 1.5 million tons of diesel. (more…)

Mar. 31 - China processed more crude oil in the first two months of 2008 to ease supply shortages throughout the country.

China processed 55.81 million tons of crude oil in January and February, a 7.4 percent increase from the same period last year the National Development and Reform Commission said on Friday.

Output of gasoline and diesel surged 4.1 percent and 12.5 percent, respectively. Natural gas production expanded by 20.3 percent.

According to the NDRC, the country’s crude oil output hit 30.78 million tons in January and February, up 1.2 percent year on year, while imports shot up 9.5 percent to 28.23 million tons. (Xinhua)

By Andy Scott

Mar. 24 - China’s largest oilfield, Daqing, increased its setimated output target to 40 million tons annually in the coming decade.

The Daqing oilfield produced 41.7 million tones of oil in 2007, slightly above the target of 41.62 million tons Xinhua reported.

The oilfield’s change in output target is related to China’s rising thirst for oil. In 2007 alone, the country imported 163.17 million tons of oil, a 47 percent increase from the mid-nineties according to the National Bureau of Statistics. At current rates of growth in consumption, China will need to import about two-thirds of its total oil requirement by 2015.

The Chinese government, which has long viewed dependency on foreign oil as a strategic weakness, is quite concerned about its declining domestic production of fossil fuel energy. It has actively sought to better exploit its current domestic resources and encourage oil and mineral exploration in its territory. PetroChina’s announcement last year of the discovery of the Bohai Bay oil field that could reach 10 million tons a year by 2010 could not have come at a better time for the oil thirsty country. (more…)

Mar. 24 - China’s largest oil refiner Sinopec and Germany-based BASF officially submitted a planned US$900 million project extension at its joint venture in Nanjing for review by the Chinese authorities on March 19.

The project, enlarging the annual production volumes of ethylene pyrolysis at Yangtsi-BASF from 600,000 tons to 750,000 tons, represents BASF’s largest petrochemical project outside Germany according to a report issued by the Ministry of Commerce.

BASF plans to tap China’s rising demand for ethylene as the country looks to more than double production capacity of the chemical by 2010. Currently imports account of half of the country’s ethylene needs.

“The completion of the feasibility study marks an important step forward,” said Wang Tianpu, president of Sinopec.

Jan. 14 - China’s crude oil imports rose 12.4 percent in 2007 over the previous year to a record 163.17 million tons, according to customs figures.

Crude oil imports for 2006 were 138.8 million tons, representing an increase of 16.9 percent from the previous year. Exports, however, fell 38.7 percent year-on-year to 3.89 million tons last year, according to the General Administration of Customs.

Crude oil exports were valued at US$79.77 billion, 20.1 percent higher than a year earlier amid international oil price hikes. Global prices surged about 57 percent throughout 2007. (more…)

By Joyce Roque 

Dec. 18 - “The main thing is to make history, not to write it.” Otto Von Bismarck

Much ado about oil
Just like the spice trade of yore where adventurers dared flinging themselves in the uncharted world for the sake of country and above all for the business of spice, it seems China is no different with the lure of spice replaced by the hunt for oil. China is the second largest importer of oil in the world with a mission to lay the groundwork for stabilizing its energy security in the future.

The world’s thirst for oil overtakes its supply despite fears of global warming. According to government specialists, oil and gas demand will remain unhindered and could climb to as much as 50 percent in the coming 25 years.

Oil industry experts also estimate that for China’s case oil demand may reach 400 million tons by 2020 with an average increase of 12 percent annually.

“There are no easy barrels left,” J. Robinson West, chairman of PFC Energy told the International Herald Tribune. “The only barrels are going to be the tough barrels.” (more…)

By Andy Scott and Lucy Brady 

Nov. 2 - The Methane to Markets Partnership Expo that concluded yesterday in Beijing was a chance for China, fast becoming the world’s largest polluter, to grab some favorable press and promote alternative energy resources in a city where the air-quality is still a thorny issue for the upcoming Olympics.

The three day expo, co-hosted by the U.S. Environmental Protection Agency (EPA) and China’s National Development and Reform Commission (NDRC), was the largest Methane to Market Expo to date and attracted more than 700 participants from 34 countries meeting to discuss alternative ways to decrease methane output while harnessing the gas as an alternative energy source.

Methane, the primary component of natural gas, is 20 times more potent than carbon dioxide and accounts for 16 percent of current greenhouse gas emissions. However, because methane only stays in the environment for roughly 12 years, action taken now would have drastic, visible results in pollution reduction in the coming years. The expo was a chance to showcase the latest technologies and educate countries about the capture and use of methane. It was also a chance for potential investors to meet vendors and developers. (more…)

By Andy Scott 

Part one: The oilmen cometh

I couldn’t help asking him once what he meant by coming there at all. “To make money, of course. What do you think?” he said, scornfully. Joseph Conrad, Heart of Darkness.

Foreign governments have been attracted to Africa for more than two centuries, greedily pursuing the continents’ timber, minerals and oil, more often than not at the cost of the people living there. Today it’s China that is most interested in Africa’s natural resources, leading critics to accuse the rising economic powerhouse of neo-colonialism.

Much has been said lately about China’s courtship of Africa. From Sudan and Darfur to the China-Africa Cooperation Forum, the growing Chinese presence in Africa illustrates Beijing’s desire to increase their global influence and create, as The Jamestown Foundation says, “a paradigm of globalization that favors China.” China has long portrayed itself as the leader of the third world, and as the country’s influence increases with its gross domestic product figures, Beijing has sought to cultivate its relationships with African nations, hoping to position itself better in the multi-polar, post-cold war world.

In this three part series, we will look at China’s emerging relationship with Africa - from oil and aid to soft diplomacy and African investment on the mainland. Part one looks at China’s chief import from the continent, oil. (more…)

In an effort to develop biofuel alternatives without harming the general food supply, China is shifting its dependence on corn as the main raw material to sorghum, cassava and sweet potato plants in the next five years.

Cassava and sweet potato are both high-yield plants, and while edible, are not a stable food like corn and won’t create any artificial shortages China Daily reported. The conversion of the four major ethanol production centers, currently outputting a combined one million tons, is not expected to be complicated or costly said Xiong Bilin, deputy director of the National Development and Reform Commission.

The government recently approved an ethanol production facility in Hebei province, expected to yield 300,000 tons of biofuel a year according to the report. Authorities are also likely to approve another ethanol-making facility in Hubei province with an expected yield of 200,000 tons of ethanol per year. (more…)

China will impose a tax on crude oil exports by foreign partners in offshore joint ventures the Ministry of Finance announced yesterday.

As reported in China Daily, the tax - a 5 percent tariff on oil exports - will take effect August 1, but existing contracts will be granted a five-year holiday.

“The move is aimed at saving domestic resources and bringing the policy for foreign companies in line with that for domestic operators,” Gong Jinshuang, a senior analyst at the economic and technology research institute affiliated to the China National Petroleum Corp, told China Daily. (more…)