Domestic E&P stepped up as tensions mount

摘要

CHINA is stepping up its domestic exploration efforts as it seeks to reduce its reliance on energy imports amid a deterioration of its relationship with the US. The US has put 10 Chinese state-owned enterprises - including offshore contractors China State Shipbuilding Corporation and China Shipbuilding Industry Corporation - on its sanctions list, while US Navy aircraft carriers have resumed dual exercises in the highly contentious South China Sea where China is producing 500,000 barrels of oil equivalent per day. The growing tensions between the two countries could threaten China's future energy supply from overseas. By 2025, state-owned China National Offshore Oil Corporation (CNOOC) plans to increase production in the South China Sea to 800,000 boepd. The escalating tensions between the world's two biggest economies following the closure of consulates in Houston and Chengdu late last week have also impacted oil prices. China is acutely aware that geological complexities could cripple its overseas oil and gas imports via sea lanes, which have already climbed to an alarming level -269 million tonnes (1.98 billion barrels) of oil and 48.35 million tonnes of gas including liquefied natural gas in the first half of this year, accounting for 70% and 40% of the total consumption, respectively.