China reports big oil discovery: 2.2 billion
barrels
By Joe McDonald
The Associated Press
BEIJING For 15 years, China's oil companies have scoured its
territory for new oil sources, drilling in Central Asian deserts
and the floor of the Pacific, hoping to reduce rising dependence on
imports.
After years of disappointment, PetroChina Ltd. announced it has
found an offshore field that could become China's biggest new
domestic-petroleum source in a decade, with reserves of 2.2 billion
barrels, the official Xinhua News Agency said Wednesday.
Such a field would be a "world-scale discovery," said Gavin
Thompson, an oil consultant in Beijing for the Scottish firm Wood
Mackenzie.
"In terms of energy security, a 2-billion-barrel discovery is going
to be very welcome, not only to PetroChina but to China's energy
planners," he said.
PetroChina disclosed last week that it found a new field in Bohai
Bay but released no details. Company spokespeople refused on
Wednesday to give more information. Thompson said PetroChina is
likely to have to do more drilling to confirm how much oil it can
extract.
Economists say Chinese oil demand, driven by blistering economic
growth that reached 10.7 percent in 2006, has strained world
supplies and pushed up prices.
China became a net oil importer in the late 1990s and now is the
world's No. 2 consumer after the United States, and consumption
last year rose another 9.3 percent to 2.4 billion barrels. Imports
in 2006 surged by 16.9 percent and accounted for 47 percent of
consumption, while domestic production edged up just 1.7 percent.
China has some 16 billion barrels of proven reserves, according to
British oil company BP PLC.
China's leaders see reliance on imported energy, a large share of
it from the politically volatile Middle East, as a strategic
weakness.
They are trying to improve the poor efficiency of China's
fuel-guzzling economy, which consumes several times as much energy
per unit of output as Japan or the United States, while pushing
state oil companies to find new domestic sources.
Chinese drillers have found several big gas fields, but no major
oil sources since the mid-1990s, when blocks were found in Bohai
Bay and in the Tarim Basin of the northwest's searing Taklamakan
Desert.
Chinese oil companies have spent billions of dollars to secure oil
and gas supplies abroad, making deals in areas as far-flung as
Venezuela and Kazakhstan. Their willingness to deal with pariahs
such as Iran and Sudan has caused friction with the U.S.
China is feuding with Japan over control of possible gas resources
in disputed waters between the two nations. China and Russia are
building pipelines to deliver Siberian gas to Chinese markets. At
home, foreign consultants have taught Chinese oilmen how to find
more and extract more from existing fields, said Jim Brock, an
industry consultant.
"They're adopting a lot of new methods, revisiting a lot of old
fields using methods that were not available 10 or 15 years ago,"
Brock said. But much of it is of mediocre quality and in rock
formations that are difficult and expensive to tap, Brock said.
