China National Petroleum Corporation

From Wikipedia, the free encyclopedia
Jump to: navigation, search
China National Petroleum Corporation
Type Government-owned corporation
Industry Oil and gas
Founded 1988 (1988)
Headquarters Dongcheng District, Beijing, China
Key people Zhou Jiping (Chairman)
Liao Yongyuan (President)
Products Petroleum, natural gas, and other petrochemicals
Revenue Increase US$ 378.025 billion (2011)[1]
Net income Increase US$ 16.317 billion (2011)[1]
Total assets Increase US$ 481.07 billion (2011)[1]
Total equity Increase US$ 240.53 billion (2011)[1]
Owner(s) Government of the People's Republic of China
Employees 1,668,072 (2011)[1]
Subsidiaries PetroChina

China National Petroleum Corporation (CNPC) (simplified Chinese: 中国石油天然气集团公司; traditional Chinese: 中國石油天然氣集團公司; pinyin: Zhōngguó Shíyóu Tiānránqì Jítuán Gōngsī)[2] is a Chinese state-owned oil and gas corporation and the largest integrated energy company in the People's Republic of China. It has its headquarters in Dongcheng District, Beijing.[3]

CNPC is the parent of PetroChina, the fourth largest company in the world in terms of market capitalization as of July 2014.[4]

Corporate structure[edit]

CNPC is the government-owned parent company of public-listed PetroChina, a company created on November 5, 1999 as part of the restructuring of CNPC. In the restructuring, CNPC injected into PetroChina most of the assets and liabilities of CNPC relating to its exploration and production, refining and marketing, chemicals and natural gas businesses.

CNPC and PetroChina develop overseas assets through a joint venture, CNPC Exploration & Development Company (CNODC), which is 50% owned by PetroChina.

In March 2014, Chairman Zhou publicly announced that CNPC would be opening some business units to private investors. [5]


Instead of Chinese Petroleum Corporation, ceased to Taiwan, following Republic of China government, CNPC can be traced from the beginning as a governmental department of the PRC government. In 1949, the Chinese government formed a Fuel Industry Ministry dedicated to the management of fuel. In January 1952 a sub department of the fuel ministry was formed to manage petroleum exploration and mining, it was called the Chief Petroleum Administration Bureau. In July 1955 a new ministry was created to replace the Fuel Industry Ministry, it was called the Ministry of Petroleum. From 1955 to 1969, approximately 4 oil fields were found in 4 areas in Qinghai, Heilongjiang (Daqing oilfield), Bohai Bay and Songliao basin. CNPC was finally created in 17 September 1988 when the government decided to disband the Ministry of Petroleum and created a state owned company to handle all Petroleum activities in China.

1993 marks the beginning of CNPC international operation. SAPET (a CNPC subsidiary) signed a service contract with the government of Peru to operate Block VII in the Talara basin. It was followed by an oil contract with the government of Sudan to manage Block 1/2/4 in the Muglad oilfield. Then in June 1997 the company bought a 60.3% stake in the Aktobe Oil Company of Kazakhstan, the next month CNPC won an oil contract for the Intercampo oilfield and East Caracoles oilfield in Venezuela.

Further In July 1998, the company was restructurized by the government in accordance with the upstream and downstream principle of oil industry.[6]

In August 2005 it was announced that CNPC agreed to buy the Alberta-headquartered PetroKazakhstan for US$4.18 billion. This would be the largest overseas acquisition by a Chinese company. The acquisition was successfully completed 26 October 2005 after a Canadian court turned down an attempt by LUKoil to block the sale.[2]. In 2006 67% of shares were sold from the parent company to PetroChina[7]

On 5 November 2007, CNPC's HK listed subsidiary PetroChina was also listed as an A share in the Shanghai Stock Exchange.

CNPC and Eni signed a $4.2 billion deal in July 2013 to acquire a 20% stake in a key Mozambique offshore natural gas block.[8]


CNPC holds proved reserves of 3.7 billion barrels (590,000,000 m3) of oil equivalent. In 2007, CNPC produced 54 billion cubic metres of natural gas.[3] CNPC spun off most of its domestic assets into a separate company, PetroChina, during a restructuring. CNPC has 30 international exploration and production projects with operations in Azerbaijan, Canada, Iran, Indonesia, Myanmar, Oman, Peru, Sudan, Thailand, Turkmenistan, and Venezuela. The exploration projects, both domestic and overseas, are run by a wholly owned subsidiary, the Great Wall Drilling Company (GWDC).[9]

New Zealand[edit]

CNPC operates in New Zealand as CCDC NZ Drilling and has one rig, a triple stand DC rig named Rig 43. CNPC (CCDC NZ) started work over/drilling operations in the Kapuni gas fields of South Taranaki New Zealand in late 2012 for "tight gas". The rig completed the Kapuni drilling campaign of 4 wells for STOS (Shell Todd Oil Services) in August 2013. Its next drilling project commenced August 2013 for Tag Oil with one well successfully drilled at Cheal C of a depth of just under 5,000m. The rig is currently awaiting decisions for appeals for the next stage of a drilling campaign for Tag Oil and is currently not operational during this period, with maintenance operations being carried out.


Main article: Rumaila field

CNPC began development of Ahdab, an oil field in Wasit Governorate holding a modest one billion barrels, in March 2009, becoming the first significant foreign investors in Iraq.[10] The project progressed despite security problems although CNPC encountered problems with local farmers. Dozens of farmers complain of damage to property because of work on the site and Iraqi oil officials claim thievery from the oil site by local farmers.[10] Adhab is not expected to be a major profit center, earning the company a projected 1 percent profit. Instead development of the field was seen as an entry strategy into Iraq.

Following Adhab, CNPC obtained a production contract during the 2009/2010 Iraqi oil services contracts tender to develop the much larger "Rumaila field" with joint venture partner BP, which contains an estimated 17.8 billion barrels (2.83×109 m3) of oil. It is expected that crude oil production from Rumaila will expand by 10% by the end of 2010 once the BP PLC/CNPC consortium takes over development of the field in June 2010.[11][12] A contract was also awarded to a consortium led by CNPC (37.5%), and which included Total (18.75%) and Petronas (18.75%) for the "Halfaya field" in the south of Iraq, which contains an estimated 4.1 billion barrels (650,000,000 m3) of oil.[13][14]


CNPC has become increasingly involved in development of Iranian oil fields following Western sanctions that target the Iranian oil and gas sectors leading many European energy companies such as Shell Oil, Repsol, and etc. to shut down operations in Iran. The CNPC along with Sinopec is involved in various projects relating to Iran oil/gas development. As of 2011, CNPC is undertaking development of Iran's age-old Masjed Soleyman Oil Field, (the oldest oil field of the Middle East) in collaboration with Iranian counterpart NIOC in a deal worth 200 million dollars. Production from this particular oil field is expected to increase this year from current 2,500 barrels (400 m3) a day to 25,000 barrels (4,000 m3) after the completion of the first phase, and to 55,000,000 bbl/d (8,700,000 m3/d) following the completion of phase 2 of the project.[15]


CNPC with Indian state oil firm, ONGC created a joint venture to acquire minority stakes ranging from about 33.3% to 38% in several mature Syrian oil and natural-gas properties. The combined entity was a notable instance of cooperation between two state oil firms that regularly competed for assets around the world.[16]


CNPC is heavily involved in the development of Kazakh oil after the acquisition of Alberta-based PetroKazakhstan, a company with all operations in Kazakhstan. The company was purchased for $4.18 billion. Political resistance in Kazakhstan to the deal was placated by the sale of a minority stake in PetroKazakhstan by CNPC to KazMunaiGaz, the Kazakh state-owned oil company.


In 2006, CNPC formed an international consortium with state-run Uzbekneftegaz, LUKoil Overseas, Petronas, and Korea National Oil Corporation to explore and develop oil and gas fields in the Aral Sea.[17]

Xinjiang Pipeline[edit]

In October 2004, CNPC began construction of a pipeline from the Middle East to Xinjiang.


In December 2011, Afghanistan signed a deal with CNPC for the development of oil blocks in the Amu Darya basin, a project expected to earn billions of dollars over two decades; the deal covers drilling and a refinery in the northern provinces of Sar-e Pol and Faryab and is the first international oil production agreement entered into by the Afghan government for several decades.[18]

South Sudan[edit]

CNPC is a major investor in South Sudan's oil sector.[19]


In May 2014, A 30 year deal between Russia's Gazprom and China National Petroleum Corporation (CNPC) which was 10 years in the making is estimated worth $400 billion, The agreement which was signed at a summit in Shanghai is expected to deliver some 38 billion cubic meters of natural gas a year eastward to China's burgeoning economy, which will start around 2018.[20]

Accidents and incidents[edit]

2003 Gas Leak in Chongqing[edit]

On 23 December 2003, a gas blowout occurred at the Luojia No. 16H gas well. 243 people died, 2,142 were hospitalised.[21]

Jilin Chemical Plant[edit]

In 2005, there were explosions at a CNPC owned petrochemical plant causing six deaths, a mass evacuation, and a massive oil spill over the Songhua River.

Gas Pipeline Explosion in Sichuan[edit]

A gas pipeline exploded on 20 January 2006 in Sichuan. Reportedly, nine were killed and nearly 40 injured.[22]

2006 Gas Leak in Chongqing[edit]

A leak occurred on 25 March 2006 in the Luojia No. 2 gas well.[21] The third attempt six days after the blowout succeeded; 15,000 were evacuated.[23]

Chishui River diesel spill[edit]

In 2009 a CNPC pipeline burst, spilling 150 m3 (5,300 cu ft) of diesel oil into the Chishui River in Shaanxi province.[24]

Xingang Port oil spill[edit]

In July 2010, two pipelines exploded at an oil storage depot belonging to China National Petroleum Corp near Dalian's Xingang Harbour in Liaoning province which spilled an estimated 1,500 tonnes of crude into the sea. The worst of the spill initially covered 180 km2 (69 sq mi).[25][26]

Suspension of operations in Chad[edit]

The operations of a CNPC subsidiary in Chad were entirely suspended in August 2013 by the country’s government after it violated environmental standards while drilling for crude oil in the south of the country.[27]

See also[edit]


  1. ^ a b c d e "Fortune Global 500 2012: China National Petroleum Corporation", Fortune.
  2. ^ A common shortname for the corporation in Chinese, Zhongguo Shiyou (中国石油), formerly shared the same name as the Chinese Petroleum Corporation, the Republic of China (Taiwan)'s state-owned fuel corporation.
  3. ^ "Contact Us." China National Petroleum Corporation. Retrieved on July 8, 2010.
  4. ^ "Global 500 July 2014". Fortune. 30 July 2014. Retrieved 30 July 2014. 
  5. ^ "CNPC chairman starts courting private investors". Oil Patch Asia. Retrieved 10 March 2014. 
  6. ^ History of CNPC, CNPC website.
  7. ^ PetroChina to acquire 67% interests in PetroKazakhstan
  8. ^ "CNPC and Eni sign Mozambique gas deal for US$4.2 billion". Oil Review Africa. 16 July 2013. 
  9. ^ Securities Daily August 2011
  10. ^ a b "China Faces Unexpected Problem Drilling for Oil in Iraq -- Farmers" The Wall Street Journal
  11. ^ Williams, Timothy (2009-09-06). "China Oil Deal Is New Source of Strife Among Iraqis". The New York Times. Retrieved 2010-04-28. 
  12. ^ "CNPC: To Raise Iraq Rumaila Oilfield Output 10% By Year-End" The Wall Street Journal[1]
  13. ^ "Shell walks away with Majnoon". 11 December 2009. 
  14. ^ "Halfaya trio sign on dotted line". 27 January 2011. Retrieved 22 August 2012. 
  15. ^ "Increase of Iranian Oil Production". Jaam-e Jam (newspaper). 2011-04-29. Retrieved 2011-04-29. 
  16. ^ "India, China Win On Venture's Bid For Syria Oil Stake " The Wall Street Journal
  17. ^ Uzbekistan, intl consortium ink deal on exploring Aral Sea ITAR-Tass
  18. ^ Harooni, Mirwais (2011-12-28). "REFILE-Afghanistan signs major oil deal with China's CNPC". Reuters. Retrieved 2012-01-01. 
  19. ^ "China to evacuate South Sudan oil workers to capital". Reuters. December 20, 2013.
  20. ^ "Russia's Putin signs 30 year gas deal with China". BBC News. 21 May 2014. 
  21. ^ a b "Prompt response to gas leakage keeps locals safe, sound". Chinese Government's Official Web Portal. Retrieved 29 May 2012. 
  22. ^ "Gas pipeline blast kills 9 in Sichuan". Chinese Government's Official Web Portal. Retrieved 29 May 2012. 
  23. ^ "Efforts made to cap leaking gas well". Chinese Government's Official Web Portal. Retrieved 29 May 2012. 
  24. ^ Mu Xeuquan (5 January 2010). "Diesel spill contaminates Yellow River tributaries". Xinhua News. Retrieved 19 July 2010. 
  25. ^ Agence France-Presse (19 July 2010). "China rushes to clean up oil spill". Yahoo! News. Retrieved 20 July 2010. [dead link]
  26. ^ "China Port Reopens After Oil Spill, Cleanup Continues". Voice of America News. 20 July 2010. Retrieved 19 July 2010. 
  27. ^ Chad suspends China's CNPC for environmental violations, International: Reuters, 2013 

External links[edit]