Shengli Oilfield
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Dramatic changes ahead for SOEs'
China's biggest state-owned companies will see "dramatic changes" in the next few years as they will have to downsize and become more efficient, according to the former chairman of two of the country's biggest producers. Chinese oil companies have "tremendous room" to improve efficiency and will be "suffering for the next few years" amid the oil crash that has pushed prices down to roughly half their value from mid-2014, said Fu Chengyu, former chairman of both Cnooc Ltd and China Petroleum & Chemical Corp, known as Sinopec. Domestic producers need at least $60 a barrel to stabilize China's slumping oil production, he said. "We are a big elephant already," Fu said in New York City on Tuesday at Columbia University's Center on Global Energy Policy. "If we don't move faster, reform ourselves faster, we will become a dinosaur." China's explorers have been hit hard by the slump in international crude oil prices because of production costs inflated by large work forces and mature domestic resources. Output from the world's second-biggest consumer has slid this year as the country's producers shut fields that are too expensive to operate at current prices, forcing the country to seek more oil from overseas. 'Dramatic changes ahead for SOEs' Fu Chengyu, former chairman of both Cnooc Ltd and China Petroleum& Chemical Corp. [Photo provided to China Daily] PetroChina Co, the country's biggest oil and gas producer, barely broke even in the first-half, even after booking a 24.5 billion yuan ($3.56 billion) one-time gain from pipeline sales. Cnooc Ltd., the biggest offshore explorer, posted a first half loss as low crude prices forced it to write down assets. Sinopec, the world's biggest refiner, posted a profit in the first three quarters this year, thanks to its oil-refining business, which benefits from low crude prices. Fu retired as Sinopec's chairman in May 2015 after working in China's oil industry for almost four decades, including serving as Cnooc's chairman. Fu was one of the first state-owned enterprise chairmen to start mixed-ownership reform by selling 30 percent of Sinopec's retail division to outside investors for $17.5 billion in 2014. China's crude production from January to October fell 6.7 percent from a year ago to 166.8 million metric tons, according to data from the National Bureau of Statistics last month. October crude output dropped 11.3 percent to 16.05 million tons, or about 3.795 million barrels a day, down 2.7 percent from September. Firing employees is not an option "either legally or culturally", Fu said. Bloomberg
Brent crude price drop takes toll on Yanchang Petroleum
Shaanxi Yanchang Petroleum (Group) Co, China's fourth-biggest oil producer by output, may cease production in some oilfields and stop drilling both old and new wells in some areas in response to the sharp plunge in crude oil prices, a media report said on Monday. The Yan'an-based company faces huge pressure over soaring cost in terms of oil exploitation, personnel and operation. The cost for oil production at Yanchang stands at about $70 per barrel, against a national average of $40, according to sources quoted by Securities Daily. In order to remain profitable, the State-run company also plans to cut capital spending by a total of 3.1 billion yuan ($480 million) this year and merge at least three oil drilling facilities, the report said. Yanchang Petroleum lowered its oil output target to 12.2 million metric tons for this year, about 200,000 tons lower than a year earlier, according to a statement on the company's website. The more than 50 percent slump in global crude oil prices since June has badly hit producer's earnings. Brent crude oil is currently below $30 a barrel, for the first time since May 2009. Yanchang Petroleum is not the first firm to respond to the price dive by cutting spending or suspending production. Shengli Oilfield, owned by China Petroleum & Chemical Corp, the nation's second-largest oil major, plans to shut down four oilfields in the country's eastern Shandong province to stay afloat. The company, also known as Sinopec, said the four oilfields are the least profitable projects in the region with only a few tens of thousands tons of production, and the shutdown could save at least 200 million yuan. At the same time, Daqing Oilfield, the largest oilfield explored by China's major oil and gas producer China National Petroleum Corp, reduced crude oil production in 2015 for the first time in seven years. Though it is a painful process to make cuts or even suspend production, it is better to act early than leave it, experts. "It is a normal practice when oil prices plunge. It is an adaption that oil companies have to make to meet market requirements," said Han Xiaoping, chief executive officer of online energy information portal China5E.com. He said the cost for oil exploitation has been rising as some wells are getting old, but oil prices have been plummeting even faster, putting huge pressure on many large oil producers. "Oil companies need to bring costs down in line with the current lower oil prices. Many foreign companies have also made plans to sell off part of their assets or even start drilling fewer wells," he said. lvchang@chinadaily.com.cn
Airport joins the club to lift Glasgow
Glasgow Airport has become the latest company to join China Club, calling it a unique venture that highlights the tourism opportunities in China and Scotland. China Club, an online platform set up this summer, is powered by China Daily Europe and hosted by Talkholiday, a travel-themed social networking website. It aims to raise awareness of the country's growing tourism market, as well as its economy and culture. Companies signed up to China Club include Dorsett Hospitality International and China Mobile. "China Club presents a fantastic networking opportunity for Chinese and Scottish residents alike," says Francois Bourienne, commercial director at Glasgow Airport. "It will give us access to some great Chinese institutions and tourism markets, as well as vital business contacts." He says the club will help the airport promote myriad opportunities, experiences and attractions in Glasgow, as well as the warm Glaswegian welcome. During President Xi Jinping's visit to the United Kingdom in October, Hainan Airlines, China's largest privately owned carrier, announced it plans launch a direct flight between Manchester and Beijing. It comes at a time when the Scottish government is keen to secure stronger transport links with the world's fastest-growing economy, to allow for greater trade. Glasgow and Edinburgh airports are both in talks with Hainan Airlines on the possibility of establishing routes to Beijing via Manchester. Glasgow Airport already works with 30 carriers, including Air Canada Rouge, American Airlines, British Airways, Virgin Atlantic, Emirates and KLM, which links it with about 110 destinations worldwide. Last year, the airport handled more than 7.7 million passengers, its fourth consecutive year of growth and its busiest since 2008. It is forecast to handle more than 8 million this year. Bourienne says Glasgow already has many links with the East Asia, particularly China, and adds: "A new air route would be both popular and beneficial for Scotland's economy and tourism market, as well as potentially would open up investment opportunities for Scottish and Chinese companies." In addition to being twinned with Dalian city in northeastern China, Glasgow is home to Scotland's largest Chinese community (more than 15,000 people), which is served by a host of Chinese markets, restaurants and cultural amenities. Glasgow and China also have many business links, says Bourienne. "It's an increasingly popular export market for Scottish businesses that are located in and around the city." Weir Group recently entered into a joint venture with Shengli Oilfield Highland Petroleum Equipment that will see the Scottish company supply pumps to China's shale gas industry, while power generator manufacturer Aggreko, which is headquartered in Glasgow, has opened a 5,300-square-meter facility in the southern Chinese city of Foshan. Meanwhile, Renfrewshire-based oil, gas and petrochemical company Doosan Babcock employs 2,000 workers at its plant in Beijing that produces industrial boilers, and Lenovo, the PC maker, has a site about 5 kilometers from Glasgow Airport. "In light of these links, a year-round flight connecting China with Glasgow would not only help generate further economic ties between Scotland and China, it would also enhance educational connections, and build more fruitful and long-term partnerships," Bourienne says. For details on becoming a China Club member, visit chnclub.org wangmingjie@mail.chinadailyuk.com (China Daily European Weekly 12/11/2015 page21)
Knowledge Graph
Examples
1 It shows excellent stimulation effect during its applications in 400 wells in Shengli oilfield.
2 The detailed seismic description of structure and reservoir is critical to successful exploration in Kendong shallow water area of Shengli oilfield.
3 On the basis of analysis of the typical technology for acrylamide, polyacrylamide production in China and abroad, The Shengli oilfield used microbiological method for acrylamide production.