New vision to help reform energy SOEs

Experts see meeting's focus boosting self-sufficiency, clean power, security

China's energy security and supply capacity will be further enhanced by the country's energy companies that have embraced a new round of high-quality development, which will further facilitate the country's carbon neutrality goals and the construction of a modern industrial system, said government officials, industry experts and corporate executives on Wednesday.

They articulated their future vision after reviewing a slew of policy measures outlined by top policymakers during the tone-setting Central Economic Work Conference held in Beijing last week.

The conference vowed to make greater efforts to step up the reserves and supply capacity of domestic energy and mineral resources, in addition to accelerating the planning and development of a new energy system.

The meeting also urged efforts to deepen the reform of State-owned enterprises while improving their core competitiveness.

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said China has been promoting an in-depth energy revolution in recent years, including enhancing clean and efficient use of coal and accelerating the development of a new energy system.

The conference has again sent a strong signal that China will vigorously explore domestic energy resources to ensure a high level of energy self-sufficiency.

The country's green and low-carbon energy development, which balances the energy transition and the stability and security of the nation's energy system, has made China's industrial and supply chains more resilient and secure, said Luo.

The country's oil majors have been expanding their exploration and development efforts while optimizing the operation of oil and gas industrial chains to ensure stable oil and gas supplies in recent years, in addition to strengthening systems for energy production, supply, storage and marketing to ensure energy security, he said.

China's energy SOEs are on record saying they will further step up their oil and gas exploration budgets in the years to come, as they have been doing during the past few years so as to confirm more reserves.

China National Offshore Oil Corp said in a recent report that offshore oil and gas exploration investment in China is expected to continue rising and more than half of the country's domestic oil increment is to come from offshore this year.

The country's offshore crude production will also continue rising in 2022 to an estimated 58.6 million metric tons, up 6.9 percent year-on-year, while offshore natural gas production this year will exceed 21.6 billion cubic meters, up 8.6 percent year-on-year, it said.

Li Ziyue, an analyst with BloombergNEF, said he believes China's offshore oil and gas production is expected to continue rising during the 2022-24 period, while its continuous upstream investment and production commitment will also play a critical role in the country's energy supply security.

China National Petroleum Corp said earlier that its domestic crude oil output increased 2.7 percent year-on-year during the first nine months this year to 577 million barrels. CNOOC completed a total net production of 461.5 million barrels of oil equivalent, representing an increase of 9.3 percent year-on-year, hitting a record high for the same period of previous years.

China Petrochemical Corp, also known as Sinopec, which is the world's largest refiner by volume, said its January-September domestic crude oil production reached 188 million barrels, up 0.8 percent year-on-year.

The three oil majors have also been stepping up investment in exploration and development to actively expand oil and gas production capacity, striving to increase reserves and production. While CNOOC saw its capital expenditure rise 20.6 percent year-on-year to about 68.69 billion yuan ($9.84 billion) in the first nine months, Sinopec said its capex stood at 104.0 billion yuan.

The National Energy Administration said earlier that China, the world's top energy consumer, will enhance a "diversified domestic supply base" centered on coal while speeding up development of domestic oil and gas resources.

The country would further strengthen its reserve system for coal and petroleum, accelerating building work, especially for storage hubs and terminals to receive natural gas, said Ren Jingdong, deputy head of the NEA.

China aims to have its production capacity of indigenous resources exceed 4.6 billion tons of standard coal by 2025, versus its 4.41 billion target for this year, the NEA said.