China National Petroleum Corporation
Encyclopedia
Fuel
Fuel is any material that stores energy that can later be extracted to perform mechanical work in a controlled manner. Most fuels used by humans undergo combustion, a redox reaction in which a combustible substance releases energy after it ignites and reacts with the oxygen in the air...
-producing corporation and the largest integrated oil and gas company in the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. It has its headquarters in Dongcheng District
Dongcheng District, Beijing
Dongcheng District is an urban district in Beijing covering the eastern half of Beijing's urban core. It is 24.7 square kilometres in area and has a population of 535,558 . Dongcheng District covers several important parts of Beijing...
, Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
.
CNPC is the parent of PetroChina
PetroChina
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...
, the second highest evaluated company in the world in terms of market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
as of June 2010.
Corporate structure
CNPC is the government-owned parent company of public-listed PetroChinaPetroChina
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...
, 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
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
and marketing, chemicals and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
businesses.
CNPC and PetroChina develop overseas assets through a joint venture, CNPC Exploration & Development Company, which is 50% owned by PetroChina.
History
CNPC can be traced from the beginning as a governmental department of the PRC governmentPolitics of the People's Republic of China
The politics of the People's Republic of China take place in a framework of a single-party socialist republic. The leadership of the Communist Party is stated in the Constitution of the People's Republic of China...
. In 1949, the Chinese government formed a Fuel Industry Ministry dedicated to the management of fuel
Fuel
Fuel is any material that stores energy that can later be extracted to perform mechanical work in a controlled manner. Most fuels used by humans undergo combustion, a redox reaction in which a combustible substance releases energy after it ignites and reacts with the oxygen in the air...
. 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
Qinghai
Qinghai ; Oirat Mongolian: ; ; Salar:) is a province of the People's Republic of China, named after Qinghai Lake...
, Heilongjiang
Heilongjiang
For the river known in Mandarin as Heilong Jiang, see Amur River' is a province of the People's Republic of China located in the northeastern part of the country. "Heilongjiang" literally means Black Dragon River, which is the Chinese name for the Amur. The one-character abbreviation is 黑...
(Daqing oilfield), Bohai Bay
Bohai Bay
Bohai Bay is one of the three bays forming the Bohai Gulf, the innermost gulf of the Yellow Sea, in northeast China. It borders Hebei province and Tianjin Municipality...
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. CNPC sign a service contract with the government of Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
to manage the Talara
Talara Province
Talara is a province in the Piura Region, Peru. It is bordered by the Pacific Ocean on the west, the Paita Province on the south, the Sullana Province on the east and the Tumbes Region's Contralmirante Villar Province on the north. Its capital is the major port city of Talara...
oilfield. It was followed by an oil contract with the government of Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
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
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
, the next month CNPC won an oil contract for the Intercampo oilfield and East Caracoles oilfield in Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
.
Further In July 1998, the company was restructurized by the government in accordance with the upstream
Upstream (oil industry)
The oil and gas industry is usually divided into three major components: Upstream, midstream and downstream, though midstream operations are usually included in the downstream category....
and downstream
Downstream (oil industry)
The petroleum industry is usually divided into three major components: Upstream, midstream and downstream. Midstream operations are usually included in the downstream category....
principle of oil industry.
In August 2005 it was announced that CNPC agreed to buy the Alberta-headquartered
Alberta
Alberta is a province of Canada. It had an estimated population of 3.7 million in 2010 making it the most populous of Canada's three prairie provinces...
PetroKazakhstan
PetroKazakhstan
PetroKazakhstan is a Canadian oil company, based in Calgary, that has all of its business focused on Kazakhstan where it had some of oil and of natural gas reserves in the Turgai basin region. These are the second largest Kazakhstani proven reserves after ChevronTexaco's TengizChevroil....
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
LUKoil
Lukoil/LUKoil ; ) is Russia's second largest oil company and its second largest producer of oil. In 2009, the company produced 97.615 million tons of oil; ....
to block the sale.http://news.bbc.co.uk/2/hi/business/4378298.stm. In 2006 67% of shares were sold from the parent company to PetroChina
On 5 November 2007, CNPC's HK listed subsidiary PetroChina
PetroChina
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...
was also listed as an A share
A share
In finance the term A share has two distinct meanings, both relating to securities.* The first is a designation for a 'class' of common or preferred stock. A shares of common or preferred stock typically have enhanced voting rights or other benefits compared to the other forms of shares that may...
in the Shanghai Stock Exchange
Shanghai Stock Exchange
The Shanghai Stock Exchange , abbreviated as 上证所/上證所 or 上交所, is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other is the Shenzhen Stock Exchange...
.
Operations
CNPC holds proved reserves of 3.7 Goilbbl of oil equivalent. In 2007, CNPC produced 54 billion cubic metres of natural gas.http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSHKG5010620081024?sp=trueCNPC spun off most of its domestic assets into a separate company, PetroChina
PetroChina
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...
, during a restructuring. CNPC has 30 international exploration and production projects with operations in Azerbaijan
Azerbaijan
Azerbaijan , officially the Republic of Azerbaijan is the largest country in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded by the Caspian Sea to the east, Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
, Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
, Myanmar
Myanmar
Burma , officially the Republic of the Union of Myanmar , is a country in Southeast Asia. Burma is bordered by China on the northeast, Laos on the east, Thailand on the southeast, Bangladesh on the west, India on the northwest, the Bay of Bengal to the southwest, and the Andaman Sea on the south....
, Oman
Oman
Oman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...
, Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
, Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...
, Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
, Turkmenistan
Turkmenistan
Turkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...
, and Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
.
Iraq
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. 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. 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 contract to develop the much larger Rumaila fieldRumaila Field
The Rumaila oil field is a giant oil field located in southern Iraq, approximately from the Kuwaiti border. The dispute between Iraq and Kuwait over allegedly slant-drilling in the field was one of reasons for Iraq's invasion of Kuwait in 1990. This field was discovered by British Petroleum in...
with joint venture partner BP
BP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
and 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.
Iran
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 SinopecSinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
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
Masjed Soleyman
Masjed Soleyman is a city in and the capital of Masjed Soleyman County, Khuzestan Province, Iran. At the 2006 census, its population was 106,121, in 22,393 families...
Oil Field, (the oldest oil field of the Middle East) in collaboration with Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
ian counterpart NIOC in a deal worth 200 million dollars. Production from this particular oil field is expected to increase this year from current 2500 barrels (397.5 m³) a day to 25000 barrels (3,974.7 m³) after the completion of the first phase, and to 55000000 oilbbl/d following the completion of phase 2 of the project.
Syria
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.Kazakhstan
CNPC is heavily involved in the development of KazakhKazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...
oil after the acquisition of Alberta-based PetroKazakhstan
PetroKazakhstan
PetroKazakhstan is a Canadian oil company, based in Calgary, that has all of its business focused on Kazakhstan where it had some of oil and of natural gas reserves in the Turgai basin region. These are the second largest Kazakhstani proven reserves after ChevronTexaco's TengizChevroil....
, 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.
Uzbekistan
In 2006, CNPC formed an international consortium with state-run UzbekneftegazUzbekneftegaz
Uzbekneftegaz ) is a state-owned holding company of Uzbekistan's oil and gas industry.-History:Uzbekneftegaz was established in 1992...
, LUKoil
LUKoil
Lukoil/LUKoil ; ) is Russia's second largest oil company and its second largest producer of oil. In 2009, the company produced 97.615 million tons of oil; ....
Overseas, Petronas
Petronas
PETRONAS, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company that was founded on August 17, 1974. Wholly owned by the Government of Malaysia, the corporation is vested with the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and...
, and Korea National Oil Corporation
Korea National Oil Corporation
Korea National Oil Corporation is the national oil and gas company of South Korea and one of the most important industrial companies in the country...
to explore and develop oil and gas fields in the Aral Sea
Aral Sea
The Aral Sea was a lake that lay between Kazakhstan in the north and Karakalpakstan, an autonomous region of Uzbekistan, in the south...
.
Xinjiang Pipeline
In October 2004, CNPC began construction of a pipelinePipeline transport
Pipeline transport is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes that transport solid capsules using compressed air are also used....
from the Middle East to Xinjiang
Xinjiang
Xinjiang is an autonomous region of the People's Republic of China. It is the largest Chinese administrative division and spans over 1.6 million km2...
.
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 RiverSonghua River
The Songhua or Sunggari River is a river in Northeast China, and is the largest tributary of the Heilong River , flowing about from Changbai Mountains through Jilin and Heilongjiang provinces. The river drains of land, and has an annual discharge of .As the Second Songhua River, it joins the...
.
Chishui River diesel spill
In 2009 a CNPC pipeline burst, spilling 150 m³ (5,297.2 cu ft) of diesel oil into the Chishui RiverChishui River (Shaanxi)
The Chishui River is a river in China. It is a tributary of the Wei River. It is located near the town of Chishui , in Hua County, under the jurisdiction of Weinan, in the northwestern province of Shaanxi....
in Shaanxi
Shaanxi
' is a province in the central part of Mainland China, and it includes portions of the Loess Plateau on the middle reaches of the Yellow River in addition to the Qinling Mountains across the southern part of this province...
province.
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 LiaoningLiaoning
' is a province of the People's Republic of China, located in the northeast of the country. Its one-character abbreviation is "辽" , a name taken from the Liao River that flows through the province. "Níng" means "peace"...
province which spilled an estimated 1,500 tonnes of crude into the sea. The worst of the spill initially covered 180 km² (69.5 sq mi).
See also
- List of oil spills
- CNPC (HK)CNPC (HK)Kunlun Energy Limited , formerly CNPC Limited, became a Hong Kong-listed company in 1993 through a backdoor listing. Its parent company is the China National Petroleum Corporation which itself was created from the transformation of the Ministry of Petroleum Industry in the People's Republic of...
- Petroleum industry in the People's Republic of China