05 November 2009 10:14 [Source: ICIS news]
By James Dennis
SINGAPORE (ICIS news)--China’s aggressive drive to acquire foreign resource assets is borne of the country's need to secure energy supplies for its burgeoning economy and should not be seen as a move to galvanise its global influence, said an official at China market intelligence service C1 Energy on Thursday.
The acquisitions should be seen in the context of the country’s rapidly growing demand for energy, said Xin Yaoyuan, vice general manager at C1 Energy, at the 2009 Asia Pacific Petroleum Conference (APPEC) in ?xml:namespace>
Oil consumption in
China imports about 51% of its crude energy needs, Xin said. The country was forced to become increasingly reliant on imported crude due to strong demand, coupled with the rapid expansion of its refining capacity, while increases to its domestic crude output had been limited, he added.
Between 2002-2008, the country's crude imports grew at an average annual rate of more than 17% and were expected to rise by 5.24% in 2009 to 188m tonnes/year (approximately 3.8m bbl/day), said Xin. Net imports of oil products into
In order to meet its energy requirements,
Being a late entrant into the global energy markets, China had to concentrate on targeting assets at countries ridden with political instability, Xin said.
Meanwhile, a joint venture between BP and CNPC to develop the giant Rumaila oilfield in
In 2008, eight new projects raised Chinese refining capacity by some 1.4m bbl/day. Between 2009 and 2013, about 3.7m bbl/day of new refining capacity would be added, Xin said.
Major projects due to be completed after 2010 include Sinochem Gaoqiao's 12m tonne/year refinery and the 15m tonne/year Sinopec-KPC Zhanjiang refinery.
The relatively high run rates of around 70-80% at Chinese refineries also raises China's crude requirements, Xin said. The government encourages refineries to run at high rates through a new pricing system that guarantees refiners reasonable margins, he added.
In addition, the steep contango in the crude and products markets had stimulated the building of strategic and commercial reserves in
End-user consumption, discounting inventory builds, had been almost flat in 2009 despite China's strong economic growth of about 8%, the C1 energy official said.
Stronger demand from the agriculture and construction sector had been offset by slack demand from transportation, industrial and power sectors, Xin said.
($1 = €0.70)
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