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CHINA / Chinese Economy |
Oil rivalry heats up in Sichuan ProvinceBy Wang Yu (China Daily)
Updated: 2007-09-07 06:31 One of the main arenas for competition between China's two major onshore oil companies is Southwest China's Sichuan Province. A land of rugged mountains and winding torrents, noisy village fairs and spicy food, the southwestern province now appears to hold major underground oil and gas reserves. It seems every week, if not daily, PetroChina and Sinopec - the two State-owned and globally listed oil and energy conglomerates - send out competing announcements of their new finds in Sichuan, with rumors spreading about "still bigger" discoveries in the pipeline. PetroChina, the country's largest oil and gas producer, is expected to announce China's largest natural gas discovery in the Sichuan city of Nanchong soon, one of the firm's senior press managers says, on condition of anonymity. It is likely that the new gas discovery will surpass PetroChina's Sulige Gasfield in Inner Mongolia and Sinopec's Puguang Gasfield in eastern Sichuan in terms of exploitable reserves, according to a retired source from China National Petroleum Corporation (CNPC), PetroChina's parent company. "As far as I know, the anticipated new PetroChina gasfield, Longgang, may have two to three times the reserves of the Puguang field run by Sinopec. That means our gasfield may hold 700 billion cubic meters of exploitable reserves," says Han Xuegong, a former energy analyst at CNPC. One billion cubic meters (bcm) of natural gas equals about 900,000 tons of oil equivalent. A source from Sinopec, Asia's largest refiner and PetroChina's competitor in gas exploration in Sichuan, confirms Han's remarks. "I have learned that PetroChina is to announce a major gas discovery in Sichuan, which is even richer than our Puguang one," says an anonymous source from Sinopec. So it is an open secret that PetroChina's Longgang Gasfield will surpass Puguang in reserves. But PetroChina is still working to determine the final reserve figure, according to Han. PetroChina plans to produce 4bcm of natural gas from its Longgang discovery before 2010, China Securities Journal reports, without quoting any source. PetroChina will announce details of Longgang's reserves within the year, Chairman Jiang Jiemin was quoted by Bloomberg News as saying. Although PetroChina's soon-to-be-unveiled gasfield may exceed Puguang's reserves, Sinopec still has one more card to play. In addition to Puguang, Asia's largest refiner is busy tapping other gasfields in Sichuan. Chen Ge, company secretary of Sinopec, says he is confident that his firm will make more astonishing discoveries that are even richer than Puguang. "Our exploration work is in full swing in the northeastern part of Sichuan Province. I am confident that something bigger will come out," Chen says. There were media reports earlier this year saying that the geological reserves at Cangxi of Sichuan Province may reach 5 trillion cubic meters. Sinopec, operator of the gasfield at Cangxi, refuses to comment on that. Sinopec's spending on exploration will account for 45 percent of its total 2007 expenditure as it drills in oil- and gas-rich areas, such as Sichuan Province and the Xinjiang Uygur Autonomous Region. Sinopec's Puguang Gasfield in Dazhou of Sichuan Province has a proven exploitable reserve of 356bcm, the country's second largest, according to the Ministry of Land and Resources. China's largest current gasfield, Sulige, in the Inner Mongolia Autonomous Region, has proven reserves of 533.6bcm. (China Daily 09/07/2007 page44) |
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