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Fueling Up the Future
Common energy security needs to be ensured by international partnership
Deng Yaqing | NO. 42 OCTOBER 20, 2016

CNPC workers withdraw from South Sudan on July 15 due to armed conflicts in the region (XINHUA)

Energy, at all ages, has been a vital factor for the development of human society. Consequently, from winning the bid for exploring some blocks in the Talara oil field in Peru in 1993 to exploring Iraq's Rumaila oil field in 2009 with British multinational BP, Chinese petroleum enterprises have been committed to improving national energy security by forming energy supply networks abroad as well as exploring and expanding overseas markets.

With Chinese President Xi Jinping putting forward the Silk Road Economic Belt and 21st-Century Maritime Silk Road (Belt and Road) Initiative in 2013, China's energy companies have begun to pay more attention to investment and cooperation in the Belt and Road region. Chinese petroleum enterprises have invested $26 billion, recruited more than 90 percent of their workforce regionally, and brought in about $150 billion in tax revenue to countries along the Belt and Road, according to statistics from the China National Petroleum Corp. (CNPC) Economics and Technology Research Institute. The CNPC is China's biggest oil producer.

"Such cooperative relations have contributed much to the economic and social development of countries along the Belt and Road," said Zhu Yingchao, a senior research fellow with the Overseas Investment Environment Research Department of the institute, at a forum on the Belt and Road energy strategy held in Peking University on September 12.

Han Wenke, a senior research fellow with the Energy Research Institute of the National Development and Reform Commission, predicted that the energy demand in China would increase in the mid and long term because before peaking, per-capita energy consumption would keep rising with GDP growth. In other words, energy will continue to be an important pillar propping up modern society.

Reciprocal scenario

Countries along the Belt and Road are not only intense oil and gas consumers but also a source of untapped potential. Unexploited proven petroleum reserves in this region amount to 133.8 billion tons, accounting for 57 percent of the world's total reserves; and unexploited proven natural gas reserves total 155 trillion cubic meters, equivalent to 78 percent of the world's total reserves, according to CNPC Economics and Technology Research Institute statistics.

"By intensifying international energy cooperation in an all-round way, China can achieve energy security, boost the international competitiveness of its energy enterprises, and gain a greater say on the global stage. The Belt and Road Initiative is a good opportunity to reinforce international energy partnerships with the countries in this region," Han said.

In this age of globalization, all countries are interconnected and complement one another. Energy security for all can be achieved and maintained only when they cooperate closely, said Han, repudiating some media reports that called the Belt and Road strategy "China's energy plunder."

According to the China and Overseas Gas and Oil Industry Report 2015 by the CNPC Economics and Technology Research Institute, China's petroleum enterprises saw the oil output of their overseas projects reach 150 million tons in 2015, equivalent to the total oil output of Brazil or Mexico.

At the same time, these companies have played a role in exporting Chinese culture, such as the concept of win-win cooperation and mutual benefits, as well as Chinese standards in the petroleum industry, said Zhu.

For instance, Chinese petroleum companies have helped Nepal, Chad and Sudan establish their own petroleum systems, built in accordance with Chinese standards.

While Chinese companies contribute capital, technology and talent in international energy cooperation, in return they obtain experience and improve their international competence, Zhu said.

According to Li Yiping, a professor of economics at Renmin University of China, underdeveloped countries along the Belt and Road have much to gain from their cooperation with China.

"China has achieved its current economic prosperity by doing business with rich countries like Japan and the United States. Underdeveloped countries along the Belt and Road can also gain growth momentum by trading and cooperating with China. It's easier for them to learn from China's development path and experience than Japan's and the United States'," Li said, explaining that these countries' comparative advantages in natural resources can be turned into economic benefits.

Chinese and local staff work together at a natural gas processing plant in Tanzania on January 29, 2015 (XINHUA)

Overseas explorations

The CNPC has been a pioneering investor in the Belt and Road region. It has undertaken 49 oil and gas cooperative projects with 19 countries in the region and constructed four major oil and gas channels connecting China with oil exporters.

The China-Myanmar oil and gas pipelines respectively start from Maday Island and Kyaukpyu Port in Myanmar's western Rakhine State, running 1,631 km and 1,727 km inland. The oil pipeline can transport 23 million tons of crude oil from the Middle East to China.

"The pipelines pass through four provinces in southwest China, which have not only remarkably shored up economic growth in this region but also completed China's pipeline network by enhancing transport capacity from the Strait of Malacca," said Ma Xiaolin, founder of, a news website. Ma has visited the project site twice.

Four countries—India, Myanmar, China and South Korea—and six companies are participating in the pipeline project. "Support from these parties has significantly facilitated construction and reduced risks," Ma said.

The project has also contributed to the local economy. As many as 200 Myanmarese companies and 6,000 local workers have participated in the construction. In the long run, domestic regions along the pipelines will see an increase in their foreign exchange earnings, tax revenues and investments.

"The CNPC has spent more than $20 million building schools, sanitary stations, and reservoirs in the regions along the pipelines. The smooth construction and operation of the project is further secured by serving local residents," Ma added.

Chinese petroleum companies' foreign projects usually involve a variety of partners, such as governments, local petroleum companies, and multinationals.

"These parties closely cooperate with one another for common benefit. The more shares they hold, the larger power they wield in project operation and management," said Zhu.

Besides, people who work at these foreign projects are highly competent and have strong adaptability. "Many foreign projects are located in places with high political, economic, safety or environmental risks. For example, the Rumaila project site is fenced by three to four walls, and the workers have to wear bullet-proof vests while going out," Zhu said.

When working abroad, Chinese petroleum companies also try to grow roots and live in harmony with the local people, supporting education, improving medical conditions, and ensuring environmental protection, Zhu added.

Chinese Petroleum Firms' Global Footprint

Chinese petroleum companies have established five oil and gas cooperation zones, four strategic channels and three operation centers.

Five overseas oil and gas cooperation zones:

United States, Canada and Mexico;

Ecuador, Peru and Brazil;

Russia and some Central Asian countries;


Asia-Pacific region

Four oil and gas channels:

Central Asia and Kazakhstan;



The Middle East, Africa and America

Three oil and gas cooperation centers:

Asia, Europe and America

(Source: CNPC Economics and Technology Research Institute)

Copyedited by Sudeshna Sarkar

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