Chinese petrochemical companies get lift from China's BRI scheme
China’s Belt and Road Initiative is helping domestic petrochemical companies expand by tapping the robust supply of oil and gas in countries along the belt and road region, said PetroChina at a conference today.
The company’s overseas oil and gas production totaled 76 million tons of oil equivalent last year, of which 59 million tons were from the region, said Zheng Jun, vice president of PetroChina International Co, at the sixth China International Oil and Gas Trade Congress.
The region accounted for 53 percent of the world’s oil production and 46 percent of gas output last year, Zheng said. He added that there's great growth potential as 131.5 billion tons of crude have been explored there, making up 55 percent of the globe’s total. Meanwhile 1.4 million cubic meters of natural gas have been explored in this region, or equivalent to 76 percent of the world's total, Zheng continued.
Supply has long exceeded demand in the region and this has attracted domestic petrochemical companies to collaborate and expand there. Sinochem’s trade totaled US$61.5 billion over the past three years in the region while PetroChina has 91 projects located in 19 countries along the route.
“Investment into that region helps diversify assets and supplies, thus better ensuring energy security and enhancing profitability,” Zheng added.
Michal Meidan, vice president of London-based Energy Aspects consultancy, said that while financial risks and policy restrictions still exist, “China’s belt and road initiative has partly offset that risk by enhancing collaboration which helps trading and production.”