Since the outbreak of the War in Iraq there has seen no big fluctuation of the oil price in China, and moreover, China's oil safety is expected to maintain stable for a long time to come.
As learned the annual oil consumption in China comes to 240 million tons, of which China produces 170 million tons of its own domestically. For the moment, China's oil imports are mainly from Saudi Arabia, Iran and Russia and some other countries. Therefore, from a short-term point of view, the war in Iraq will probably increase the cost for oil importation, such as the increase of insurance premium, but won't exert a great impact on China's oil price as a whole.
The oil China imported every year from Iraq accounts for only one percent of the total import volume, around 700,000 tons, said Zhang Dawei, Deputy Director of the Oil and Gas Resources Strategic Research Center with the Ministry of Land Resources. The shortage can easily be made up from the other areas.
Dr. Chen Huai, Research fellow of the R & D Center of the State Council holds that the oil-supply capacity in China sees a bit over than what is needed. Though China's oil price is related to that in the world market yet it is still within the controllable and adjustable scale in which the state can work out a suitable way for the control over the price-rising rate in line with the relevant rules for oil price.
Continue to maintain a stable increase of oil production
In regard to the oil production all major oil enterprises in China have so far maintained a stable or increasing production. The Daqing Oil Field, No.1 oil production base in China is planned to produce 48.3 million tons of oil this year but up to Mar 10 it had actually brought out more than 9.2 million tons. The Shengli Oil Field, No.2 in China has witnessed a stable increase in production for 4 consecutive years. The annual planned output is 26.6 million tons and the production came to 6.5 million tons in the first quarter of the year.
While the domestic production is guaranteed the Chinese government has paid more attention to the strategy of "going out", letting the enterprises to cooperate with foreign enterprises to tap for more oil-shares in the world oil market, setting up overseas oil-supply bases. Up to now, China Petroleum Co. has already acquired oil-shares of 9 to 10 million tons. The registered prospecting area by Shengli Oil Field in Iran has come to 4600 square kilometers.
China also learns ceaseless good news from its major oil production bases as to ascertaining the newly increased oil reserves. Last year, the Daqing Oil Field completed a foretold reserve of 96.41 million tons yet the controlled reserve was more than 65 million tons, which was on a par with that of the year before. The Shengli Oil Field saw a better result. Up to the end of last year, the yearly increased reserve newly tapped out was over 100 million tons in the past 20 years on end and moreover it has realized a balanced production in the past 6 consecutive years.
Increase oil deposits to cope with the market fluctuation
As indicated by the data of the national energy center with the Ministry of Land Resources, for the moment the oil-deposits in China are mainly concentrated in the China Petrochemical Co. and China Oil Co., etc. They will play an important role in regulating the oil price in China. In addition to that, the plan for strategic oil reserve has also been approved with some of them being put into effect, for instance to build an underground oil-tank at Ningbo and to practice the policy for restricted exploitation of fine-quality oil in northwest China and so on.
The newly built two oil-tankers, the largest of its kind in China are located in the petrochemical plant at Maoming, Guangdong Province, its per unit volume being 125,000 cubic meters. As the largest oil-transfer base in south China, the depositing capacity for crude oil in Maoming Petrochemical Plant has come to over 1.5 million tons.
An official estimation indicates, the oil consumption increases 0.59 percent with every one percentage point increase of the GDP in China. Along with the fast and continuous increase in China's economy, China's oil needs will come to 250 million tons by the year of 2005 and to 290 million tons in 2010 and further to 350 - 400 million tons by the time of 2020. And in the days to come, China will continue to tap for more oil by strengthening macro-control for readjustment so as to realize a long and stable benefit of national oil safety and security.
(People's Daily April 6, 2003)