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…)

PetroChina has announced that crude oil output from the newly discovered oil field in Bohai Bay could reach 10 million tons a year by 2010-about 200,000 barrels a day or nine percent of the nation’s current oil output. This is good news for China which imported a record 3.3 million barrels of crude a day in March and 47 percent of its oil needs last year.

The discovery of a large oil field with oil reserves reaching 1,020 million tons in the region of the Jidong tidal area of Bohai Bay should help to offset China’s growing dependence on foreign oil. PetroChina announced May 3 that the Jidong Nanpu Oilfield that it had confirmed in principle, the amount of the reserve by drilling the three-level geological reserves of oil and gas, including proved reserves of original oil in place of 405 million tons, probable reserves of 298.3 million tons, possible reserves of 202.2 million tons and proved original natural gas in place of 140 million tons. 

Although the newly discovered field is huge, it is still unknown exactly how much of an impact it will have on China’s oil imports. Most of the county’s imports come from the politically unstable Middle East, and China’s leaders have long viewed dependency on foreign oil as a strategic weakness.

April 3 - The Ministry of Commerce (MOC) recently issued two guidelines on how domestic and foreign companies can apply for wholesale crude and refined oil licences.

According to The People’s Daily, these guidelines are set to bring about de facto market deregulation but analysts say that without reform of the oil-pricing mechanism, new players will be hesitant to enter the market. (more…)

The National Development and Reform Commission (NDRC) announced that over the next three years, China’s two top energy giants China National Petroleum Corporation (CNPC) and Sinopec will spare no efforts to double output from the Xinjiang Uygur Autonomous Region to 44 million tons of oil, the People’s Daily reported. (more…)

Feb. 27 - China is planning to extend its oil and gas pipelines nearly 63 percent by 2010 to meet rising energy demand, according to the nation’s key pipeline builder. Around 25,000 kilometres of energy pipelines will be added according to Su Shifeng, director of the China Petroleum Pipeline Bureau (CPPLB). China currently has 40,000 kilometers of energy pipelines.

The CPPLB, which currently undertakes construction of more than 80 percent of China’s oil and gas pipeline, recorded US$52.5 million in profits last year, up 82.6 percent from 2005 according to company reports. (more…)