Chinese Energy Giants Sign Billion-Dollar Deals At International Expo

Chinese state-owned energy giants signed deals worth billions of dollars with companies from around the world during a recent expo that took place in China.

According to a report in China Daily, the companies included China National Petroleum Corp, or CNPC, and China Energy Investment Corp.

CNPC signed a total of 30 purchase contracts worth $16.8 billion with partners including Aramco, Kuwait Petroleum Co., and Schlumberger, the report said.

This brings the total value of contracts signed during the five China International Imports Expos that have taken place so far to $92.79 billion for CNPC alone, the company said.

"The expo has provided the State-owned energy companies with a platform for resources allocation and innovation development, as well as opportunities to further cooperate with international peers," said the chief of intelligence and research at Sinopec Economics and Development Research Institute, Luo Zuoxian.

China is highly dependent on imported energy commodities, which has spurred the government into directing state-owned energy majors to boost both domestic oil and gas production, and partnerships abroad to secure sufficient supply.

Still, China remains dependent on imports for more than 70 percent of its needs, even though in 2021 it saw a drop in this dependence, from 73.6 percent in 2020 to 72 percent. Last year, crude imports fell for the first time in two decades, by 5.3 percent - a development that analysts attributed to higher domestic production.

Gas dependence is lower but still significant, at 45 percent of consumption in 2021. This compared with 34 percent in 2016 and 21 percent in 2011, according to official data cited by Reuters.

Domestic gas production has been growing consistently, at an annual rate of some 7 percent since 2011, but demand has been growing much faster, by 11 percent annually, deepening China’s dependence on imports and stimulating dealmaking abroad.

By Charles Kennedy for Oilprice.com

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