• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 1 hour COVID 19 May Be Less Deadly Than Flu Study Finds
  • 4 hours 60 mph electric mopeds
  • 20 mins Would bashing China solve all the problems of the United States
  • 7 mins Chicago Threatens To Condemn - Possibly Demolish - Churches Defying Lockdown
  • 4 hours China to Impose Dictatorship on Hong Kong
  • 33 mins Let’s Try This....
  • 4 hours Nothing can shake AMLO’s fossil-fuel fixation
  • 10 hours Pompeo's Hong Kong
  • 9 mins HVDC Cheaper Than Low-carbon Natural Gas
  • 56 mins Oil and Gas After COVID-19
  • 5 hours Iran's first oil tanker has arrived near Venezuela
  • 5 hours Natural gas is crushing wind and solar power
  • 6 hours New Aussie "big batteries"
  • 11 hours Monetary and Fiscal Policies in Times of Large Debt:

China’s State Oil Giants Slash Spending

While the U.S. oil industry is in the throes of panic as demand has fallen out of the oil market, China is suffering its own oil crisis— resulting in capex cuts for its major oil giants that seek to derail the Asian nation’s ambitious plans to get a stronger foothold in the world’s oil market.

China’s three largest state-run oil and gas companies—PetroChina, CNOOC, and Sinopec—are making significant cuts their 2020 spending plans as oil prices falter.

CNOOC will cut capex this year by 11% over previously published figures. For 2020, CONOOC’s capex will fall to 75-85 billion yuan (US$10.6-12.0 billion). It will not only cut capex at home, but abroad as well, including across its operations in Canada and the United States. In the United States.

PetroChina is planning an even bigger cut to spending this year, to $28 billion from $41.6 billion. That’s after a Q1 loss of $2.29 billion. For comparison, it saw a profit of $10.25 billion in Q1 2019, according to several media sources.

Sinopec is making a 20%-25% cut to capex for 2020, to 108 billion - 115 billion yuan (US$15.2 billion to US$16.2 billion), according to a research note from Sanford C. Bernstein & Co. cited by Bloomberg.

The cuts to capex for China’s oil majors are a deviation from its years-long practice of pumping oil at great expense to cover the significant oil consumption needs, which have simmered down in Q1 and Q2 due to lowered industrial output due to the spread of the coronavirus that originated in Wuhan, China.

As Bloomberg pointed out, China’s oil industry capex cuts are in line with other global oil major capex cuts that we’ve seen over the last month.

The price of Brent had slipped to $22.61 by Thursday morning, down from more than $65 per barrel at the beginning of the year. 

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

 



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News