China-Russia Crude Oil Pipeline Begins Operations
Associated Press / August 29, 2010
SHANGHAI (AP) -- Russia has opened its section of a crude oil pipeline from eastern Siberia to China, a major step in expanding energy cooperation between the neighboring powers.
The 1,000-kilometer (625-mile) pipeline will connect Russian oil fields with Daqing, a major oil production base in northeastern China.
''For China, this will help stabilize its energy supplies and security. For Russia, this offers a new market for exports to the Asia-Pacific region, especially dynamic and developing China,'' the state-run China National Petroleum Corp. quoted Russian Prime Minister Vladimir Putin as saying, in a statement issued Monday on its website.
Russia is the world's biggest energy producer and China is the world's largest energy consumer, overtaking the United States last year. Although Europe remains Russia's largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.
Speaking at the ceremony Sunday in the Russian city of Skovorodino marking the pipeline's opening, Putin said cooperation would not be limited to oil exports. Russia welcomes Chinese help in exploiting its abundant resources in the Far East and in expanding refining and marketing, he was quoted as saying.
The Chinese segment of the pipeline is still under construction but is expected to begin operations before the year's end, the statement said.
Eventually, the pipeline is to provide 30 million tons of oil a year to China, with exports to the Asia-Pacific region expanding to a total of 50 million tons a year, Putin was quoted as saying.
During a visit by Putin to Beijing late last year, Russia signed dozens of commercial pacts worth $3.5 billion and set the framework for a separate, multibillion-dollar agreement to build two natural gas pipelines to China from gas fields in Russia's Far East that would provide supplies almost matching China's current consumption.
Showing posts with label oil. Show all posts
Showing posts with label oil. Show all posts
Monday, August 30, 2010
Thursday, April 15, 2010
China + Brazil = Oil!
Just a random doc that may pique some people's interest.
More international cooperation beyond Shell & PetroChina.
Cooperation Agreement with China
More international cooperation beyond Shell & PetroChina.
Rio de Janeiro, April 15th, 2010 – Petróleo Brasileiro S.A. – Petrobras announces that today it signed a Strategic Cooperation Agreement with China Petrochemical Cooperation (SINOPEC) and China Development Bank Corporation (CDB) aimed at assessing mutually beneficial opportunities on the areas of cooperation. The Agreement is a development of the Memorandum of Understanding (MOU) signed between Petrobras and SINOPEC on May 19th, 2009.
The Agreement includes the cooperation between Petrobras and Sinopec in the following areas: Exploration & Production (E&P); Downstream; Petrochemical and fertilizers; and Services and Procurement.
In the E&P area there stands out the intention of the parties to assess future partnerships, including the possibility of selling part of Petrobras’s interest in blocks BM-PAMA-3 and BM-PAMA-8, located in the Pará-Maranhão Basin.
In Downstream and Petrochemical, the parties intent to assess opportunities for partnership in the Petrochemical Complex of Rio de Janeiro – Comperj, besides the possibility of new oil supply contracts to SINOPEC.
In addition, the Agreement includes the cooperation with CDB in relation to the possibility of bilateral financing under the scope of the Cooperation Agreement, to be negotiated between the parties by Petrobras demand.
Sincerely,
Investors Relations
Sunday, April 4, 2010
One consequence of China's coal imports - the risks of shipping
Chinese Freighter Slams Into Great Barrier Reef
By Keith Bradsher
Published: April 4, 2010 (The New York Times)
HONG KONG — A large Chinese freighter carrying coal to China ran aground late Saturday on a section of the Great Barrier Reef off Australia, raising fears that it might leak engine fuel on coral in its immediate vicinity.
The Shen Neng 1 crashed into the reef at full speed a few hours after leaving the port of Gladstone, the Australian authorities said. The ship, which was nine miles outside its authorized shipping lane, was hauling 72,000 tons of coal and had 1,000 tons of bunker fuel aboard.
Australian officials warned that the vessel was in danger of breaking apart, and there were reports on Sunday night of traces of oil already leaking from the vessel. An Australian aircraft reportedly dropped chemical dispersants on the oil.
Basil M. Karatzas, a project manager at Compass Maritime Services, a ship broker in Fort Lee, N.J., said that it was not unusual that the 755-foot Shen Neng 1 would be carrying that much oil. A ship of that size and design would burn about 35 tons of fuel a day, he said, and would require at least two weeks to sail from eastern Australia to China.
Ships headed to China carry extra fuel to be ready for long delays on arrival, as port delays are common because commodities are pouring into the country to sustain its economic boom. Depending on the fuel’s density, the amount carried by the Shen Neng would equate to about 300,000 gallons.
“Weather permitting, they should be able to pull the oil off the vessel,” Mr. Karatzas said. As to the ship’s cargo, he added, coal is much less toxic than oil, but it could blanket the sea bottom if the ship comes apart.
China is the world’s largest consumer of coal, burning more than the United States and the European Union combined. China has rapidly increased its imports in the past year, partly because domestic supply has not increased fast enough to keep up with power plants coming into use.
Coal imported from Australia, Indonesia and the Philippines also tends to burn much more cleanly than the mostly low-quality coal mined in China, and the Chinese government has been putting ever greater pressure on coal-fired power plants to manage their pollution.
Relations between China and Australia have frayed since a Chinese court imposed prison sentences of seven to 14 years on four executives of Rio Tinto, an Australian mining company. The executives pleaded guilty to accepting $13.5 million in bribes to influence their allocation of scarce iron ore to Chinese steelmakers.
Rio Tinto dismissed the executives, but the Australian government criticized the harshness of the seven-year sentence for bribery imposed on Stern Hu, an Australian citizen who was among the four.
Australia’s environmental movement is very sensitive to any threat to the Great Barrier Reef, making it likely that a full investigation will be carried out into how the Shen Neng 1 strayed so far off course. It ran aground near Great Keppel Island off eastern Australia, nearly halfway off the coast between Brisbane and Cairns, in an area of the reef that is subject to especially stringent environmental restrictions and that is popular with sport fishermen.
“Australia is one of those jurisdictions that doesn’t take these things lightly,” Mr. Karatzas said.
An Australian police boat was nearby to rescue the crew of 23 if the vessel did break up.
The Chinese carrier Shen Neng 1 ran aground and was leaking oil around the Great Barrier Reef off of Australia.
By Keith Bradsher
Published: April 4, 2010 (The New York Times)
HONG KONG — A large Chinese freighter carrying coal to China ran aground late Saturday on a section of the Great Barrier Reef off Australia, raising fears that it might leak engine fuel on coral in its immediate vicinity.
The Shen Neng 1 crashed into the reef at full speed a few hours after leaving the port of Gladstone, the Australian authorities said. The ship, which was nine miles outside its authorized shipping lane, was hauling 72,000 tons of coal and had 1,000 tons of bunker fuel aboard.
Australian officials warned that the vessel was in danger of breaking apart, and there were reports on Sunday night of traces of oil already leaking from the vessel. An Australian aircraft reportedly dropped chemical dispersants on the oil.
Basil M. Karatzas, a project manager at Compass Maritime Services, a ship broker in Fort Lee, N.J., said that it was not unusual that the 755-foot Shen Neng 1 would be carrying that much oil. A ship of that size and design would burn about 35 tons of fuel a day, he said, and would require at least two weeks to sail from eastern Australia to China.
Ships headed to China carry extra fuel to be ready for long delays on arrival, as port delays are common because commodities are pouring into the country to sustain its economic boom. Depending on the fuel’s density, the amount carried by the Shen Neng would equate to about 300,000 gallons.
“Weather permitting, they should be able to pull the oil off the vessel,” Mr. Karatzas said. As to the ship’s cargo, he added, coal is much less toxic than oil, but it could blanket the sea bottom if the ship comes apart.
China is the world’s largest consumer of coal, burning more than the United States and the European Union combined. China has rapidly increased its imports in the past year, partly because domestic supply has not increased fast enough to keep up with power plants coming into use.
Coal imported from Australia, Indonesia and the Philippines also tends to burn much more cleanly than the mostly low-quality coal mined in China, and the Chinese government has been putting ever greater pressure on coal-fired power plants to manage their pollution.
Relations between China and Australia have frayed since a Chinese court imposed prison sentences of seven to 14 years on four executives of Rio Tinto, an Australian mining company. The executives pleaded guilty to accepting $13.5 million in bribes to influence their allocation of scarce iron ore to Chinese steelmakers.
Rio Tinto dismissed the executives, but the Australian government criticized the harshness of the seven-year sentence for bribery imposed on Stern Hu, an Australian citizen who was among the four.
Australia’s environmental movement is very sensitive to any threat to the Great Barrier Reef, making it likely that a full investigation will be carried out into how the Shen Neng 1 strayed so far off course. It ran aground near Great Keppel Island off eastern Australia, nearly halfway off the coast between Brisbane and Cairns, in an area of the reef that is subject to especially stringent environmental restrictions and that is popular with sport fishermen.
“Australia is one of those jurisdictions that doesn’t take these things lightly,” Mr. Karatzas said.
An Australian police boat was nearby to rescue the crew of 23 if the vessel did break up.
Monday, March 15, 2010
China moves into S. America
Deal for South American Oil Fields Extends China’s Global Quest for Energy
By JAD MOUAWAD
Published: March 14, 2010
The New York Times
China’s top offshore oil explorer, said on Sunday that it had secured a South American beachhead by agreeing to pay $3.1 billion in cash for a stake in one of the largest Argentine oil explorers, with fields in Argentina, Bolivia and Chile.
Kin Cheung/Associated Press
Cnooc's chief executive, Fu Chengyu, said the company's deal with Bridas of Argentina was “to expand our global footprints.”
The acquisition is the Chinese oil industry’s latest move to expand its reach around the world. Starting at the beginning of the decade, companies like PetroChina, Sinopec and Cnooc began buying assets across Africa, Asia and the Middle East to drive the country’s booming economy. More recently, they have struck deals to develop Iraq’s huge reserves and Canada’s oil sands.
Cnooc, a unit of the China National Offshore Oil Corporation, said it would form a joint venture with the Argentine oil explorer, Bridas Energy, by acquiring a 50 percent share in one of the company’s subsidiaries, the Bridas Corporation.
The Bridas unit has proven reserves of 636 million barrels of oil, and daily production of 92,000 barrels a day. It owns 40 percent of Pan American Energy, the Argentine oil producer, with BP owning the rest.
Tuesday, February 23, 2010
China exceeds US to become Saudi Arabia's top oil customer
Notable milestone:
By the end of 2009, the amount of the crude oil that China imported from Saudi Arabia exceeded 1 million barrels per day, while the US, the primary importer of the country's oil before, imported less than 1 million barrels per day for the first time since more than 20 years.
Full article here: http://business.globaltimes.cn/china-economy/2010-02/507404.html
By the end of 2009, the amount of the crude oil that China imported from Saudi Arabia exceeded 1 million barrels per day, while the US, the primary importer of the country's oil before, imported less than 1 million barrels per day for the first time since more than 20 years.
Full article here: http://business.globaltimes.cn/china-economy/2010-02/507404.html
Thursday, February 4, 2010
China takes risky step with Myanmar pipelines (Reuters)
Click for full-size image.An article from Reuters on the new natural gas and oil pipelines routed to China via Burma/Myanmar. Summary of the article's main points (with some extra tidbits):
"The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way. [This is known in domestic energy strategy circles as the "Malacca Strait dilemma."] Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia."
China takes risky step with Myanmar pipelines
Reuters / 03 Feb 2010
By Ben Blanchard
BEIJING, Feb 3 (Reuters) - China will soon be burning oil and gas piped in through Myanmar, but putting some of its energy security in the hands of a pariah state beset by international sanctions and civil strife could be a risky gamble.
A gas pipeline with annual capacity of 12 billion cubic meters is due to come on-stream within the next two years, carrying the fuel from military-ruled Myanmar's rich offshore deposits into southwestern China.
If all goes to plan, China at some point in the near future will start also receiving 12 million tons of oil a year via a separate pipeline, about as much as it imported from Sudan last year, its fifth-largest supplier. There is no exact date for its opening yet.
Myanmar [once known as a Burma] is a friend of China, which has stood by the country's ruling generals, selling arms and providing diplomatic cover when needed -- with an eye firmly on Myanmar's natural resources and access to the Indian Ocean.
But the relationship is more a practical partnership than a meeting of minds, despite the parallels between the two authoritarian governments. Myanmar's military harbors a profound mistrust of its powerful northern neighbor, while China worries instability in Myanmar could spill over into its territory. Those fears came to the fore last August when fighting between Myanmar's military and the Kokang rebel group pushed thousands of refugees into China. Myanmar's army ended up firing across the border, provoking irritation in Beijing.
"If Beijing thinks that the pipeline in Burma is going to be relatively trouble-free then they ought to rethink," said Maung Zarni, a Myanmar expert at the London School of Economics (LSE) Centre for the Study of Global Governance. "Even a regime that is currently in a marriage of convenience with them would fire into Chinese territory," he added.
MALACCA STRAIT PROBLEM
China, the world's second-largest oil user, sees the pipelines as a way to get around what in domestic energy strategy circles is known as the "Malacca Strait dilemma".
The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way.
The area already has a piracy problem. In 2005, the Joint War Committee of the Lloyd's Market Association added the area to its list of war risk zones.
Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia.
"One of the pipelines will be purely for oil, and that oil isn't coming from Burma. It will be offloaded from tankers coming from the Middle East and then piped to Yunnan and on. It's very important," said Ian Storey, a fellow at Singapore's Institute of Southeast Asian Studies. "One way of looking at the Kokang incident is the Burmese were actually just clearing the border in preparation for that pipeline. So China couldn't be too critical of that incident because it's in their own interests."
But the benefits may be more than offset by two major risks -- the many disparate rebel groups who have fought Myanmar's central government for decades, and popular mistrust at an influx of Chinese migrants and traders into Myanmar.
"Think of a population that is seething with resentment towards the Chinese that borders on hatred," said LSE's Maung Zarni. "An 800-km pipeline is too good a target if the Burmese want to harm Chinese interests."
Already, residents along the pipelines' route have attacked Chinese workers and offices, angry at the seizure of their land and property, said Wong Aung, a spokesman for the Shwe Gas Movement, which is campaigning against the project. "We can only imagine people's anger at the Chinese," he said by telephone from Thailand. "That kind of social unrest, or attacks, could take place at any time."
Factor in India's jockeying for influence in Myanmar, driven by Delhi's fears that China is surrounding it with pro-Beijing states, and the potential for problems rises further. "If at any time India feels they have lost Burma to China, you can easily imagine a scenario where India quietly assists disgruntled military units or dissident groups which may become radicalized to target Chinese assets," Maung Zarni said.
But Myanmar is keeping India in the game by offering stakes in the pipeline to two Indian gas companies. State-run Gail India will pick up a 4 percent stake and Oil and Natural Gas Corp (ONGC) will take another 8-8.5 percent, Indian media reported last month.
PUBLIC RELATIONS DISASTER
The project could become another international public relations disaster for China, coming hot on the heels of the opprobrium Beijing attracted ahead of the 2008 Olympics for its oil investments in Sudan.
Rights groups have repeatedly expressed concern that pipeline construction will bring abuses against local peoples, mainly by Myanmar's army which will be tasked with protecting the project.
Yet desire for the oil and gas is such that the risk of another unhappy round of poor global public relations for China is one Beijing will be happy to take, said David Mathieson, Myanmar researcher for New York-based Human Rights Watch.
"Potentially that pipeline project could really become a touchstone for all the other things China does in Burma, and it could be immensely embarrassing to them," he said. "(But) I actually don't think that's enough to stop the project. They've wanted that gas for a very long time."
URL: http://www.alertnet.org/thenews/newsdesk/TOE60D08W.htm
- Pipeline projects in Burma/Myanmar may help China tackle the "Malacca Strait dilemma," an issue of national/energy security
- Pipelines may be easy target to sabotage for rebel groups fighting the military junta
- Despite China being its largest weapons supplier, Myanmar government is deeply suspicious of Beijing
- China risks public relations disaster over human rights, as the government in Myanmar is truly repressive
"The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way. [This is known in domestic energy strategy circles as the "Malacca Strait dilemma."] Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia."
China takes risky step with Myanmar pipelines
Reuters / 03 Feb 2010
By Ben Blanchard
BEIJING, Feb 3 (Reuters) - China will soon be burning oil and gas piped in through Myanmar, but putting some of its energy security in the hands of a pariah state beset by international sanctions and civil strife could be a risky gamble.
A gas pipeline with annual capacity of 12 billion cubic meters is due to come on-stream within the next two years, carrying the fuel from military-ruled Myanmar's rich offshore deposits into southwestern China.
If all goes to plan, China at some point in the near future will start also receiving 12 million tons of oil a year via a separate pipeline, about as much as it imported from Sudan last year, its fifth-largest supplier. There is no exact date for its opening yet.
Myanmar [once known as a Burma] is a friend of China, which has stood by the country's ruling generals, selling arms and providing diplomatic cover when needed -- with an eye firmly on Myanmar's natural resources and access to the Indian Ocean.
But the relationship is more a practical partnership than a meeting of minds, despite the parallels between the two authoritarian governments. Myanmar's military harbors a profound mistrust of its powerful northern neighbor, while China worries instability in Myanmar could spill over into its territory. Those fears came to the fore last August when fighting between Myanmar's military and the Kokang rebel group pushed thousands of refugees into China. Myanmar's army ended up firing across the border, provoking irritation in Beijing.
"If Beijing thinks that the pipeline in Burma is going to be relatively trouble-free then they ought to rethink," said Maung Zarni, a Myanmar expert at the London School of Economics (LSE) Centre for the Study of Global Governance. "Even a regime that is currently in a marriage of convenience with them would fire into Chinese territory," he added.
MALACCA STRAIT PROBLEM
China, the world's second-largest oil user, sees the pipelines as a way to get around what in domestic energy strategy circles is known as the "Malacca Strait dilemma".
The fear is that during a conflict, a hostile power could choke off energy supplies that are taken on supertankers through the narrow Strait of Malacca between Malaysia and Indonesia. Some 80 percent of China's oil imports arrive this way.
The area already has a piracy problem. In 2005, the Joint War Committee of the Lloyd's Market Association added the area to its list of war risk zones.
Bringing energy supplies through Myanmar is a handy way to avoid the Strait, and expands efforts to diversify supply routes with crude and gas pipelines from Central Asia.
"One of the pipelines will be purely for oil, and that oil isn't coming from Burma. It will be offloaded from tankers coming from the Middle East and then piped to Yunnan and on. It's very important," said Ian Storey, a fellow at Singapore's Institute of Southeast Asian Studies. "One way of looking at the Kokang incident is the Burmese were actually just clearing the border in preparation for that pipeline. So China couldn't be too critical of that incident because it's in their own interests."
But the benefits may be more than offset by two major risks -- the many disparate rebel groups who have fought Myanmar's central government for decades, and popular mistrust at an influx of Chinese migrants and traders into Myanmar.
"Think of a population that is seething with resentment towards the Chinese that borders on hatred," said LSE's Maung Zarni. "An 800-km pipeline is too good a target if the Burmese want to harm Chinese interests."
Already, residents along the pipelines' route have attacked Chinese workers and offices, angry at the seizure of their land and property, said Wong Aung, a spokesman for the Shwe Gas Movement, which is campaigning against the project. "We can only imagine people's anger at the Chinese," he said by telephone from Thailand. "That kind of social unrest, or attacks, could take place at any time."
Factor in India's jockeying for influence in Myanmar, driven by Delhi's fears that China is surrounding it with pro-Beijing states, and the potential for problems rises further. "If at any time India feels they have lost Burma to China, you can easily imagine a scenario where India quietly assists disgruntled military units or dissident groups which may become radicalized to target Chinese assets," Maung Zarni said.
But Myanmar is keeping India in the game by offering stakes in the pipeline to two Indian gas companies. State-run Gail India will pick up a 4 percent stake and Oil and Natural Gas Corp (ONGC) will take another 8-8.5 percent, Indian media reported last month.
PUBLIC RELATIONS DISASTER
The project could become another international public relations disaster for China, coming hot on the heels of the opprobrium Beijing attracted ahead of the 2008 Olympics for its oil investments in Sudan.
Rights groups have repeatedly expressed concern that pipeline construction will bring abuses against local peoples, mainly by Myanmar's army which will be tasked with protecting the project.
Yet desire for the oil and gas is such that the risk of another unhappy round of poor global public relations for China is one Beijing will be happy to take, said David Mathieson, Myanmar researcher for New York-based Human Rights Watch.
"Potentially that pipeline project could really become a touchstone for all the other things China does in Burma, and it could be immensely embarrassing to them," he said. "(But) I actually don't think that's enough to stop the project. They've wanted that gas for a very long time."
URL: http://www.alertnet.org/thenews/newsdesk/TOE60D08W.htm
Thursday, January 28, 2010
China Sees Oil at $80 a Barrel (WSJ)
As reported in the Wall Street Journal, NDRC, China's macroeconomic planning body, predicts that international oil prices "will average $80 a barrel this year—about 25% higher than last year—reinforcing analysts' expectations that Chinese demand will continue to help push prices up despite concerns that recent credit-tightening moves could crimp its appetite for fuel." Full story here.
Notable quotes:
Notable quotes:
- International Energy Agency forecasts China's oil demand for the year will average 8.82 million barrels a day, an increase of 4.3% from last year's 8.46 million barrels a day. Chinese oil demand surged 7.2% higher from 2008 as the government's giant stimulus package revived construction and car sales.
- Figuring out China's situation is difficult because of a lack of transparency. There is no reliable data available on how much oil is going into government or company inventory stockpiles.
- Typically, Chinese demand surges ahead of major holidays, such as the Chinese Lunar New Year that starts in mid-February this year, when tourism spikes, or when Chinese buyers think the government is about to raise prices. Then, in following months, demand may fall as the stockpiles are used up before companies go back to buying again.
- In past months, analysts pointed out a strange trend that gasoline demand wasn't growing nearly as fast as other oil products. That could be partly explained by Chinese buying cars with smaller engines and using them less.
- China's rising demand for crude also reflects new oil refineries starting up. Much of their product is exported, where it can be sold for a higher price than in the domestic market. For the first time in more than a decade, China was a net fuel exporter, according to energy analyst Paul Ting.
Sunday, January 17, 2010
Map: China's oil empire
A neat graphic on China's foreign oil investments, via Joshua Keating of Foreign Policy.
"China's Economic Observer has put together the following map of overseas expansion by China's big three oil giants, CNOOC, CNPC, and Sinopec." (Click the graphic to get the interactive version.)
As Keating notes, "notably absent from this map is Sudan, where CNPC has extensive and very controversial holdings.
URLs:
http://blog.foreignpolicy.com/posts/2009/07/28/tuesday_map_chinas_oil_empire
http://www.eeo.com.cn/zt/sgbtyw/
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