• 5 hours Oil Prices Rise After API Reports Major Crude Draw
  • 6 hours Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 6 hours Gazprom Speaks Out Against OPEC Production Cut Extension
  • 7 hours Statoil Looks To Lighter Oil To Boost Profitability
  • 8 hours Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 9 hours Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 10 hours Whitefish Energy Suspends Work In Puerto Rico
  • 11 hours U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 23 hours Thanksgiving Gas Prices At 3-Year High
  • 1 day Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 1 day South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 1 day Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 1 day Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 1 day Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 4 days Shell Oil Trading Head Steps Down After 29 Years
  • 4 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 4 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 4 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 4 days Venezuela Officially In Default
  • 4 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 5 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 5 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 5 days Rosneft Announces Completion Of World’s Longest Well
  • 5 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 5 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 5 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 6 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 6 days Africa’s Richest Woman Fired From Sonangol
  • 6 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 6 days Russian Hackers Target British Energy Industry
  • 6 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 6 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 6 days Lower Oil Prices Benefit European Refiners
  • 6 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 7 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 7 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 7 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
New Battery Design Could Crush Tesla

New Battery Design Could Crush Tesla

Elon Musk’s old rival, Henrik…

Are Oil Prices About To Turn Lower?

Are Oil Prices About To Turn Lower?

As too many bearish factors…

James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

More Info

Chinese Oil Major Sees Itself Forced To Shut Down Oil Fields

Chinese Oil Major Sees Itself Forced To Shut Down Oil Fields

China’s oil major Sinopec has responded to the disappointing results of yesterday’s Doha meeting by announcing the temporary closure of four oil fields that have been in production for over 50 years.

Sinopec (China Petroleum & Chemical), the second-largest producer in China and the largest refiner in Asia, will temporarily shut down four oil production projects after Saudi Arabia, Venezuela, Russia and Qatar said they would pursue an anti-climactic freeze on output to January levels.

From the Chinese oil major’s perspective, the freeze to January levels—which still requires agreement from other producers—is not enough to sustain some operations.

Related: OPEC Ups Pressure On Iraq, Iran To Freeze Production

The four sites slated for closure are in the Shengli oilfield in Shandong province, which Sinopec says are among the poorest performers.

With average production costs in China running between $40-$60 per barrel, state-backed producers are suffering major losses, including PetroChina (the largest) and CNOOC.

“At current oil prices, the shutdown could save 130 million yuan (HK$155 million) of costs and reduce losses by 200 million yuan,” the company said on its website.

Related: Oil Production Rumor Mill Continues To Turn As Iran Hints At Freeze

In 2015, Sinopec’s profits declined more than 50 percent, and oil production is expected to further decline this year, by around 2 percent.

Analysts expect an even greater decline.

“Sinopec has been maintaining output in its aging oil fields by over-investing and this is no longer possible in the current oil price environment,” Bloomberg cited Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein, as saying.

Beveridge estimates that Sinopec needs oil to stay above $50 a barrel to break even, and that its domestic production will drop 5-10 percent this year.

For China’s major oil companies, the price slump could lead to sweeping reforms that see them lose exploration licenses to private companies.

By James Burgess of 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