China National Petroleum Corp. has formed a new company to explore for oil and gas offshore China and overseas. The state-owned CNPC consolidated two units – Liaohe Oil Exploration Bureau and Dagang Petroleum Group – to form China National Petroleum Offshore Engineering Co.
The new company will conduct offshore drilling, engineering, design, and maintenance of production platforms. The government hopes the move will promote offshore oil exploitation, helping increase domestic oil supply.
Traditionally China's two largest oil producers, CNPC and China Petrochemical Corp., dominate land and shallow water exploration, while the biggest player in offshore oil production is China National Offshore Oil Corp.
Currently, CNPC produces about 1 million metric tons of oil a year in shallow waters in Bohai Bay, less than 1% of its total production. With more effort going into offshore exploration, the company intends to produce 4 million tons of crude a year in Chinese waters by 2010.