BIZCHINA / Energy & Mining
10th Five-Year Plan
Updated: 2006-04-18 11:27
Competition will be introduced to break up the monopoly in ocean-land and
geographic boundary divisions in order to get a clearer picture of the
national reserves . Then, appropriate measures will be taken to improve
the structures of exploration and storage to establish a national oil
reserve system. At the same time, current regulations on international
cooperation in oil exploration both onshore and offshore will be updated
to expand win-win cooperation with foreign partners in oil and gas
exploration.
3) To make great efforts to develop natural gas industry in order to
optimize energy structure. Natural gas industry will enjoy top priority
in energy investment allocation in order to strengthen exploration and
increase output. Measures will be taken to encourage investment from more
channels to explore and extract natural gas and to build pipelines and
infrastructures.
Projects related to natural gas will be granted favorable policies in
terms of loans. New regulations will be established with regards to
pricing, tax, environmental protection research to nurture natural gas
industry. At the same time, measures will be taken to speed up the coal
gas development.
4) To encourage domestic enterprises to take active parts in
international market to source oil and gas from various origins. Domestic
enterprises will be encouraged to conduct their business internationally.
They are expected to play a more active role in joint exploration and
extraction overseas and build up oil and gas production bases there. In
this way, domestic technology, equipment, materials and labor are
expected to enter overseas markets. Measures will also be taken to
encourage more overseas oil and gas to enter domestic market.
5) To speed up establishment of a national oil reserves system under
unified planning. A national oil reserves system should be established
because it can ward off or cushion any possible negative effects incurred
by supply disruptions, price upheavals and other unexpected events. and
ensure a stable oil supply. Certain proportion of the oil supplies,
controled by the government, will be marketed to cover operation and
maintenance costs.
In the early stage of the project, a greater proportion of the oil will
be allocated to the market to alleviate government financial load. Funds
for reserve infrastructure will be mainly provided by the government, but
more financial resources will be sought through policy loans, issuance of
securities. At the same time, an enterprise reserve system will also be
set up.
6) To reform financial system for oil investment, strengthen supervision
and perfect policies and organizational structure. Government approval
for each project will be phased out. Enterprises will be decision makers
and risk takers; Banks are entitled to grant loans independently and the
government will assume the role of a supervisor. The investors will be
decision makers, beneficiaries, and also risk takers under the new
investment management. International practices will be adopted, through
legislation and administrative measures, to better major management
system and regulate business operations. Laws and regulations on oil
resource management and commercial activities will be enacted.
2: A brief introduction to the development of China's oil and gas industry
Oil and gas industry has developed into a fundamental industry in China's
economy. So far, up to 688 oil and gas fields have been discovered in 25
provinces, cities, autonomous regions and offshore areas. China has set
up six oil and gas zones, including 24 production bases, like Daqin,
Shengli, Liaohe, Xinjiang, Sichuan, Changqin, Bohai and South China Sea.
China has become the fifth biggest oil producer in the world with an oil
production of 160 million metric tons in 2000 from a paltry 121,000
metric tons in 1949. China ranks fifteenth in gas production with an
output of 27.7 billion cubic meters in 2000. By the end of 1999, China
has built 11,300km long-distance oil pipelines, 11,800km long-distance
gas pipelines. Now an oil network connecting Northeast China, North China
and East China, and a gas network connecting North China and
Sichuan-Chongqing have been set up. A system including exploration,
extraction, designing, operations, scientific and technological research
and technical supporting services has been in place in the industry.
By the end of 1999, the discovered oil reserves amounted to 20.56 billion
metric tons, with 5.93 billion recoverable. 42.4 percent of the total
recoverable oil reserves are discovered with 8.07 billion metric tons to
be discovered, enjoying a huge potential for exploration. The total
natural gas resources amounted to 380 million cubic meters (kcm) with an
estimated 105 kcm recoverable. Up till now, 23 kcm of natural gas has
been discovered with 14.8 kcm recoverable. Only 14 percent of the
recoverable resources has been found so far. Despite all these, China is
still at preliminary stage in gas exploration. The country is rich in
coal gas. It is roughly projected that China hs 3,000-3,500 billion cubic
meters of gas reserves up to 2000 meters deep on land.
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