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Energy bureau likely to benefit sector

By Xiao Wan (China Daily)
Updated: 2008-04-09 09:13

Businesspeople swap notes at the Eighth China International Petroleum & Petrochemical Technology and Equipment Exhibition (CIPPE), which opened in Beijing yesterday. [China Daily]

Editor's note: China International Petroleum & Petrochemical Technology & Equipment Exhibition (CIPPE), the nation's largest oil equipment expo, opened in Beijing on Monday. Over 800 businesses will attend the three-day event.

Recent reform of the nation's energy administration will boost the oil equipment sector, a senior energy official said yesterday.

"The new National Energy Bureau will provide more market-oriented services to the country's oil equipment manufacturers to improve the industry," Zhou Xi'an, director of the Office of the National Energy Leading Group, said.

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The country's oil equipment manufacturing has made great strides in recent years, with oil exploiting and drilling equipment now up to the world standard, he said.

The nation's export of oil equipment - including drilling machines, spare parts and steel oil pipe - increased over 50 percent in 2007, compared with a year earlier. Robust exports were buoyed by strong demand worldwide, Customs sources said.

Prevailing price hikes on the global oil market and ensuing big profits have prompted major oil producers to expand their businesses and increase investment, the sources said. Moreover, major oil producers in the Middle East, the US and Russia are upgrading equipment.

China changed from being a net importer to a net exporter of machinery in 2006. Machinery exports grew 40.74 percent in 2007, or 20.67 percentage points faster than the rate of increase for imports.

Oil majors PetroChina, Sinopec and CNOOC have all said they will focus on equipment manufacturing. CNOOC plans to invest 15 billion yuan ($2.14 billion) to develop deep-sea oil equipment as it plans to increase exploration and development of deep-sea oil resources.

Cities such as Daqing in Heilongjiang and Dongying in Shandong have said they are working hard to become key oil equipment manufacturers.

Oil and gas pipeline products are becoming a big part of the machinery sector. The government plans to extend its oil and gas pipelines nearly 60 percent by 2010 to meet rising demand for energy, according to PetroChina, the nation's top pipeline builder.

China's oil and gas pipeline industry has increased an average 14 percent since 1996. Between 2000 and 2005, China has built more pipelines than it did in the preceding years, Tang Yali from PetroChina's natural gas and pipeline company said.

This February, work began on the second west-to-east natural gas pipeline, which will mainly carry natural gas from Turkmenistan and China's Xinjiang Uygur autonomous region to the Yangtze and Pearl river delta areas.

Construction of the 9,102-km gas pipeline, which consists of a main line and eight sub-lines, will cost 142.2 billion yuan.

The nation's machinery industry output rose about 32 percent in 2007 to a record level of more than 7 trillion yuan, according to the China Machinery Industry Federation. It was the fifth consecutive year in which the annual growth rate exceeded 20 percent.

The government put the equipment manufacturing industry on its agenda for the current 2006-10 period, including developing large-scale oil equipment.