China National Petroleum Corporation
|Industry||Oil and gas|
|Wang Yilin (Chairman)|
Zhang Wei (President)
|Products||Petroleum, natural gas, and other petrochemicals|
|CN¥44.560 billion (2015)|
|Total assets||CN¥4.034098 trillion (2015)|
|Total equity||CN¥2.079396 trillion (2015)|
Number of employees
|Parent||State-owned Assets Supervision and Administration Commission|
|Footnotes / references|
in consolidated basis
The 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) is a major national oil and gas corporation of China PR and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing. CNPC was ranked fourth in 2017 Fortune Global 500, a global ranking of the largest corporations by revenue.
- 1 Corporate structure
- 2 History
- 3 Operations
- 4 Accidents and incidents
- 5 See also
- 6 References
- 7 External links
CNPC is the government-owned parent company of publicly listed PetroChina, which was 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 hydrocarbon exploration and production, refining and marketing, chemicals and natural gas businesses. CNPC and PetroChina develop overseas assets through a joint venture, the CNPC Exploration & Development Company (CNODC), which is 50% owned by PetroChina.
Unlike the Chinese Petroleum Corporation, which was relocated to Taiwan with the retreat of the Republic of China following the communist revolution in 1949, CNPC can be traced from the beginning as a governmental department of the Communist government of China. In 1949, the Chinese government formed a 'Fuel Industry Ministry' dedicated to the management of fuel. In January 1952 a division of the fuel ministry was formed to manage petroleum exploration and mining, called the 'Chief Petroleum Administration Bureau'. In July 1955 a new ministry was created to replace the Fuel Industry Ministry, 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 created on 17 September 1988, when the government decided to create a state-owned company to handle all Petroleum activities in China and disbanded the Ministry of Petroleum.
CNPC's international operations began in 1993. The CNPC subsidiary SAPET signed a service contract with the government of Peru to operate Block VII in the Talara Province basin. This was followed by an oil contract with the government of Sudan "In June 1997, the Greater Nile Petroleum Operating Company was established with the China National Petroleum Corporation (CNPC) taking 40 percent ownership". In August 2005 it was announced that CNPC agreed to buy the Alberta-based PetroKazakhstan for US$4.18 billion, then the largest overseas acquisition by a Chinese company. The acquisition went through on 26 October 2005 after a Canadian court turned down an attempt by LUKoil to block the sale. In 2006 67% of shares were sold from the parent company to PetroChina In June 1997, the company bought a 60.3% stake in the Aktobe Oil Company of Kazakhstan, and in July 1997 CNPC won an oil contract for the Intercampo oilfield and East Caracoles oilfield in Venezuela.
In July 1998, the government restructured the company in accordance with the upstream and downstream principle of the oil industry. and CNPC spun off most of its domestic assets into a separate company, PetroChina. On 5 November 2007, HK listed PetroChina was listed as an A-share in the Shanghai Stock Exchange.
In June 2014, the "head of a key China National Petroleum subsidiary was recalled to Beijing" and fell "from public view". Replacement of China National Petroleum's top representative in Canada was announced in July.
CNPC holds proven reserves of 3.7 billion barrels (590,000,000 m3) of oil equivalent. In 2007, CNPC produced 54 billion cubic metres of natural gas. CNPC has 30 international exploration and production projects with operations in Azerbaijan, Canada, Iran, Indonesia, Myanmar, Oman, Peru, Sudan, Niger, Thailand, Turkmenistan, and Venezuela. Many of the company's exploration projects are carried out by the Great Wall Drilling Company (GWDC), a wholly owned drilling services company.
In 2018 the company announced it's building natural gas storage facilities with a total capacity of 55.6 billion cu m in the northern Henan province, to ease supply bottlenecks in peak winter season. China has accelerated the construction of underground gas storage facilities due to the challenges faced in transporting gas last winter, when logistical issues forced buyers to truck LNG thousands of kilometres from import terminals to consumption areas. The country has started an ambitious program to convert large numbers of coal-fired boilers to cleaner natural gas, to curb smog and pollution.
In March 2009, CNPC began development of Ahdab, an oil field in Wasit Governorate holding a modest one billion barrels, becoming "the first significant foreign investors" in Iraq. The contract is a renegotiated version of a 1997 agreement between China and Iraq under Saddam Hussein. The project progressed despite security problems with local farmers. Dozens of farmers complained of damage to property because of work on the site and Iraqi oil officials claimed thievery from the oil site by local farmers. Adhab is not expected to be a major profit center, earning the company a projected 1 percent profit, but 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. A contract was also awarded to a consortium led by CNPC (37.5%), including 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.
CNPC became increasingly involved in development of Iranian oil fields following Western sanctions that targeted the Iranian oil and gas sectors leading many European energy companies such as Shell Oil, Repsol, etc. to shut down operations in Iran. The CNPC along with Sinopec has been involved in various projects relating to Iran oil/gas development. As of 2011, CNPC has been developing Iran's age-old Masjed Soleyman Oil Field, the oldest oil field of the Middle East, together with Iranian counterpart NIOC in a deal worth 200 million dollars. Production from this particular oil field was expected to increase in 2011 from 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.
CNPC with Indian state oil firm, ONGC created a joint venture to acquire minority stakes ranging from about 33.3% to 39% 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.
CNPC is one of the most active Chinese companies in the petroleum sector in Kazakhstan. It 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.
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.
The Great Wall Drilling Company, a subsidiary of the China National Petroleum Company, invested $700 million in drilling 57 wells in Sudan over a 3-year period starting in 1997. In 2010, the company was awarded a contract by the Sudanese Petroleum Ministry to build 5 oil rigs for $75.5 million.
In May 2014, A 30-year deal between Russia's Gazprom and China National Petroleum Corporation (CNPC) which was 10 years in the making was estimated worth $400 billion. The agreement was signed at a summit in Shanghai and is expected to deliver some 38 billion cubic meters of natural gas a year, starting around 2018, to China's burgeoning economy.
CNPC operated in New Zealand as CCDC (NZ) Drilling and had one drilling rig, a triple stand DC rig named Rig 43. 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 was then stood down pending appeals for the next stage of a drilling campaign for Tag Oil in March 2014. Due to the periods involved it was decided to end its drilling campaign in New Zealand. Rig 43 was then dismantled and shipped to other overseas locations and no longer operates in New Zealand.
Accidents and incidents
2003 Gas Leak in Chongqing
On 23 December 2003, a gas blowout occurred at the Luojia No. 16H gas well. 243 people died, 2,142 were hospitalised.
Jilin Chemical Plant
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
A gas pipeline exploded on 20 January 2006 in Sichuan. Reportedly, nine were killed and nearly 40 injured.
2006 Gas Leak in Chongqing
Chishui River diesel spill
Xingang Port oil spill
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).
Suspension of operations in Chad
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.
- "Fortune Global 500 2012: China National Petroleum Corporation", Fortune.
- "中国石油天然气集团公司2015年度报告" [China National Petroleum Corporation 2015 Annual Report]. Shanghai Clearing House. 29 April 2016. Retrieved 7 May 2016.
- 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.
- "Contact Us." China National Petroleum Corporation. Retrieved on July 8, 2010. Archived May 5, 2010, at the Wayback Machine
- "China National Petroleum". Fortune.
- "CNPC chairman starts courting private investors". Petro Global News and Oil Patch Asia, LLC. 2014-03-06. Retrieved 10 March 2014.
- Hammond, Joseph. "Sudan: China's Original Foothold in Africa". The diplomate. Retrieved 27 April 2019.
- "CNPC secures PetroKazakhstan bid". BBC. 26 October 2005. Retrieved 6 August 2014.
- "PetroChina to acquire 67% interests in PetroKazakhstan" (in Chinese).[permanent dead link]
- History of CNPC, CNPC website.
- "CNPC and Eni sign Mozambique gas deal for US$4.2 billion". Oil Review Africa.com. 16 July 2013.
- Chester Dawson; Alistair MacDonald; Brian Spegele (July 28, 2014). "Chinese Corruption Probe Stretches Into Canada Billion-Dollar Oil-Sands Project Is Left in Limbo". WSJ.com. Dow Jones & Company, Inc. Retrieved 7 August 2014.
- "UPDATE 1-PRESS DIGEST - China - Oct 24". Reuters. 23 October 2008. Retrieved 5 August 2014.
- Securities Daily August 2011
- "China Faces Unexpected Problem Drilling for Oil in Iraq -- Farmers" The Wall Street Journal May 22, 2009 Gina Chon
- Iraq and China Sign $3 Billion Oil Contract Washington Post August 29, 2008 Amit R. Paley
- Williams, Timothy (2009-09-06). "China Oil Deal Is New Source of Strife Among Iraqis". The New York Times. Retrieved 2010-04-28.
- "CNPC: To Raise Iraq Rumaila Oilfield Output 10% By Year-End" The Wall Street Journal
- "Shell walks away with Majnoon". upstreamonline.com. 11 December 2009.
- "Halfaya trio sign on dotted line". upstreamonline.com. 27 January 2011. Retrieved 22 August 2012.
- "Increase of Iranian Oil Production". Jaam-e Jam. 2011-04-29. Retrieved 2011-04-29.
- "India, China Win On Venture's Bid For Syria Oil Stake " The Wall Street JournalDec 21, 2005
- Vakulchuk, Roman and Indra Overland (2019) “China’s Belt and Road Initiative through the Lens of Central Asia”, in Fanny M. Cheung and Ying-yi Hong (eds) Regional Connection under the Belt and Road Initiative. The Prospects for Economic and Financial Cooperation. London: Routledge, p. 119.
- Uzbekistan, intl consortium ink deal on exploring Aral Sea Archived July 27, 2010, at the Wayback Machine ITAR-Tass
- Harooni, Mirwais (2011-12-28). "REFILE-Afghanistan signs major oil deal with China's CNPC". Reuters. Retrieved 2012-01-01.
- "China to evacuate South Sudan oil workers to capital". Reuters. December 20, 2013.
- Patey, Luke (2014). The New Kings of Crude. C. Hurst & Co. (Publishers) Ltd.
- "Sudan to drill 11 new oil wells for $166.5 mln". Reuters. September 29, 2010.
- "Russia's Putin signs 30 year gas deal with China". BBC News. 21 May 2014.
- "Prompt response to gas leakage keeps locals safe, sound". Chinese Government's Official Web Portal. Archived from the original on 2 May 2006. Retrieved 29 May 2012.
- "Gas pipeline blast kills 9 in Sichuan". Chinese Government's Official Web Portal. Archived from the original on 22 May 2014. Retrieved 29 May 2012.
- "Efforts made to cap leaking gas well". Chinese Government's Official Web Portal. Archived from the original on 25 April 2006. Retrieved 29 May 2012.
- Mu Xeuquan (5 January 2010). "Diesel spill contaminates Yellow River tributaries". Xinhua News. Archived from the original on 6 November 2012. Retrieved 19 July 2010.
- Agence France-Presse (19 July 2010). "China rushes to clean up oil spill". Yahoo! News. Archived from the original on July 21, 2010. Retrieved 20 July 2010.
- "China Port Reopens After Oil Spill, Cleanup Continues". Voice of America News. 20 July 2010. Retrieved 19 July 2010.
- Chad suspends China's CNPC for environmental violations, International: Reuters, 2013