Focus On "Three Barrels Of Oil" Annual Work Conference: Continue To Increase The Upstream Business

In January 16th, CNOOC's 2020 annual working conference was held in Beijing. So far, China's three largest oil companies have held their annual work meetings.

Looking back in 2019, China's oil industry achieved a major breakthrough, reversing the decline in China's oil production since 2014. Statistics from the China Petroleum and economic technology research institute show that in 2019, three barrels of oil (PetroChina, Sinopec and CNOOC) increased investment in exploration and development, and achieved a crude oil output of 1.91 million tons, an increase of 1.1%.

The change of China's oil industry is not only reflected in the upstream oil and gas increment, but also affected by the intensive operation of large-scale private refineries. The demand for crude oil has increased rapidly to 6.94 billion tons, and the net import volume of crude oil has exceeded 5 billion tons for the first time, reaching 5.03 billion tons, up nearly 10% from the same period last year.

At the same time, significant progress has been made in China's natural gas infrastructure interconnection and key projects, LNG receiving station receiving capacity, and gas storage peak shaving capacity. The natural gas market reform has been steadily advancing, and the domestic gas safety and supply capacity has been significantly improved.

"Although China's external dependence on crude oil and oil has increased in 2019, the upward trend has obviously been curbed," an industry insider told reporters. "In the face of changes in the past hundred years, oil companies need to shoulder greater responsibilities in safeguarding national energy security and implementing the strategy of energy transformation."

PetroChina has extended its consistent thinking in the past few years, while paying attention to the exploration and development of upstream resources, and put forward some new requirements. Gan Jun photo

Key points of "three barrels of oil"

In January 14th, PetroChina and Sinopec held annual work meetings respectively.

In terms of Sinopec, 2020 is defined as the year of decisive victory for comprehensive sustainable development, the year of tackling key issues of comprehensive deepening reform, and the year of building foundation for high-quality development. Emphasize 2020, first of all, we must stabilize quality and improve operation level and economic efficiency.

"Further optimizing production and operation, maintaining the main economic and technological indicators, making steady progress, creating market competitive advantages, differentiated value-added services, competitive advantages, low-cost competitive advantages and integrated competitive advantages," Dai Houliang, chairman of Sinopec Group Company emphasized.

At the same time, we should vigorously promote major risks, effectively guard against and defuse, manage deficit enterprises, and solve the problems left over by history. We should seize the target and work hard together to complete the task of winning the year. In 2019, Sinopec's Shengli Oilfield, which has suffered losses for three consecutive years, realized profits in all its subsidiaries, and completed the loss reduction target one year ahead of schedule, which has become an important achievement of the company's annual reform.

In addition, Sinopec in 2020 will deepen structural reforms in the supply side, and strive to make greater breakthroughs in the transformation of new and old energy, and accelerate the upgrading of industrial competitiveness, independent innovation capability and the level of opening up to external cooperation. We must implement the three year plan of state owned enterprise reform, intensify the market reform, grasp the supporting mechanism construction, and push the reform of the system to go deep, real and market-oriented.

PetroChina has extended its consistent thinking in the past few years, while paying attention to the exploration and development of upstream resources, and put forward some new requirements.

Wang Yilin, chairman of CNPC, pointed out that we should fully promote the domestic oil and gas production equivalent to a new level of 2 million tons. Vigorously promote the exploration and development efforts, the main oil fields will continue to maintain stable production and increase production, accelerate the construction of the 30 billion party atmospheric area and shale gas production.

In the face of the poor performance of the oil products business throughout the year, Wang Yilin said that we should pay close attention to the sales of refined oil products to make up deficits and increase profits. We should promote market-oriented reforms, differentiated marketing and meticulous management, and strive to improve sales structure and reduce costs.

In the situation of the establishment of the pipe network company and the independent development of the pipeline network into a new historical development stage, the company has taken the initiative to adapt to the new pattern of "separation of pipelines and pipelines" and "Russell gas eastward" market, effectively exerting the advantages of capital, resources, talents and management, innovating the business mode, increasing sales and increasing efficiency, improving the terminal scale, and ensuring the market supply of key areas in key areas.

CNOOC, on the 16 day working conference, the new chairman Wang Dongjin stressed that vigorously implement the "seven year plan of action to increase production and production", to accelerate the construction of natural gas supply and storage system, to contribute to the protection of national energy security, and actively integrate into the national strategy, effectively expand the company's development space.

In the recent performance prospects of the joint stock company, Wang Dongjin said that in 2020, we should push forward the production and production of oil and gas and maintain the competitive cost of barrel oil. Especially in China's sea area, it will be carried out in three aspects. The first is strategic discovery. For the important exploration areas at basin level or sag level, it is important to confirm the source of hydrocarbon. The second is the strategic breakthrough, aiming at the favorable exploration area and field, focusing on the determination of the reserves growth area; third, the strategic development, the progressive exploration and target evaluation of the mature areas of the various marine areas.

Domestic oil and gas situation is complex and changeable.

In 2019, the situation of domestic oil and gas industry changed a lot.

First, there is a substantial increase in investment in exploration and development. In accordance with general secretary Xi Jinping's important instructions on "increasing domestic oil and gas exploration and development and ensuring China's energy security in the next few years", the major oil and gas companies increased investment in oil and gas exploration and development. In 2019, investment in exploration and development in the upper reaches of our country increased by 332 billion 100 million yuan, up 21.9% over the same period last year. It is also the most growing year in nearly 4 years.

Refining and chemical industry, with the rise of private enterprises and the entry of foreign capital, domestic refining and ethylene capabilities have entered a new round of rapid growth channels. In 2019, the total refining capacity increased to 860 million tons / year, the total capacity of ethylene was 30 million tons / year.

According to the projects currently under construction and approved construction and planning, China's refining capacity will rise to 1 billion 20 million tons / year in 2025, and ethylene capacity will break 50 million tons / year, ranking first in the world. It is worth noting that as the oil refining industry speeds up the integration of refining and chemical industry and superimposes the rapid growth of ethylene capacity, the surplus of refining capacity has further expanded to the downstream of the refining and chemical industry, resulting in the possibility of excess capacity of low-end bulk petrochemical products.

At the same time, due to the frequent occurrence of geopolitical risk and other factors, the premium, premium and freight of China's imported crude oil have increased substantially, and some major airlines have increased by more than ten times. That is why China's crude oil price dropped by only 4.6% when the global crude oil price dropped by 10%. With the rising cost and fierce competition, China's refining and chemical industry will usher in a downward spiral of gross profit.

In addition, the process of marketization reform of oil and gas industry has accelerated significantly since the beginning of this year. In 2019, the government promulgated a number of policies around the implementation of the "opinions on deepening the structural reform of oil and natural gas" to promote the full opening of the oil and gas industry. At the same time, we should comprehensively promote the transfer of mining rights competition, reform the operation mechanism of oil and gas pipelines, control the two sides in the middle, deepen the reform of oil and gas price formation mechanism, and strengthen market supervision. The reform of the oil and gas industry system and mechanism has broken the original trade barriers, and the implementation of the new deal will further promote the marketization process.

How to adapt these new changes to China's energy central enterprises will become the most severe test in the future.