China Supply and Demand Model

pup55 · Expert Joined: May 26, 2004 Posts: 3586

Here's a bonus graph for you. I put it in a separate thread for tracking China supply and demand data as it comes in.

The average growth rate for china's demand over the last 7 years is about 7.5%, remarkably low considering their supposed economic growth.Their oil production growth rate is about 1.7%. If they keep that same trajectory, they will be using as much as the US by 2020, and importing practically all of it.

On top of this, with five times the poplulation of the US, their per-capita consumption will still only be 1/5 that of the US.

Also, their domestic reserves as currently stated are only 16 gb, which means that at any time, they could go into decline, unless they are really efficient and find some more oil. If my calculation is right, they will be 50% depleted by 2012 and if Hubbert is right, their domestic fields will go into decline at that time.

Somebody is going to have to do without oil.

rockdoc123 · Light Sweet Crude Joined: May 16, 2005 Posts: 1667

Here's an interesting bit of stats I dug up.

CNPC, the largest of the Chinese companies in 2000 had no operations outside of China but by end 2005 they were in 27 foreign countries and had producing assets in 7 countries. They also had refinery operations in a couple of countries and had entered into a pipeline arrangement to bring oil from Kazachstan to China overland through the Tarim basin area of W. China. At end 2005 CNPC's domestic production was ~ 741 MMB (2 MMB/d) whereas their International production was ~200 MMB (0.6 MMB/d).
To my mind this is astounding growth in such a short period of time, and from what I have seen they have no intention of stopping. There are a number of largish discoveries that haven't been brought on stream yet so the International side of the production will continue to rise.

An interesting addition is the business model that CNPC uses. They have a number of subsidiary companies like Greater Wall drilling and Chinese National Logging Company and BGP seismic company that provide a variety of wellfield and exploration services. By setting up these subs in the various countries they can capture money at all ends of the petroleum chain which effectively makes them very difficult to compete with as their net costs are much lower than potential competitors.

sirrom · Posted: Thu May 31, 2007 7:14 am Post subject: Re: China Supply and Demand Model