Overseas Oil and Gas Operations

OMMP
Overseas Oil and Gas Operations
Annual
Report
CNPC's overseas oil and gas operations are carried out
primarily by its wholly-owned subsidiary, the China
National Oil and Gas Exploration and Development
Corporation (CNODC), and its holding subsidiary,
PetroChina Company Limited (PetroChina), in the
areas of overseas oil and gas exploration, development,
production, refining and chemicals, storage,
transportation, and marketing. Presently, CNPC's
overseas oil and gas operations have formed a rudimentary scale, capable of carrying out exploration and
development, pipeline transportation, refining and
chemicals, and terminal marketing operations overseas.
Exploration and Production
In 2003, CNPC strengthened its overseas oil and gas exploration. Through a
Block 3/7
series of measures such as strengthening integrated geologic study,
2,297 kilometers of 2D seismic data and 309 square kilometers of 3D
intensifying implementation of exploration projects and increasing
seismic data were acquired, with 23 exploration wells (including 17 wildcat
exploration investments, CNPC's oil and gas exploration and production
wells and 6 appraisal wells) drilled and 14 wells tested.
maintained a large increase in 2003.
Block 6
Operations
1,039 kilometers of 2D seismic data and 770 square kilometers of 3D
In 2003, CNPC's overseas oil and gas operations acquired 7,464 kilometers
wells and 7 appraisal wells) drilled.
seismic data were acquired, with 21 exploration wells (including 14 wildcat
of 2D seismic data and 1,979 square kilometers of 3D seismic data, with 81
exploration and appraisal wells newly drilled.
Indonesia
737 kilometers of 2D seismic data and 283 square kilometers of 3D seismic
Sudan
Block 1/2/4
1,438 kilometers of 2D seismic data and 467 square kilometers of 3D
seismic data were acquired, with 19 exploration wells (including 15 wildcat
wells and 4 appraisal wells) drilled and 13 wells tested.
data were acquired with 7 exploration and appraisal wells drilled.
Productions and Reserves
By the end of 2003, the accumulative proven recoverable reserves of
Block 1/2/4
CNPC's overseas projects reached 1.14 billion tons, with accumulative
9 oil-bearing faulted blocks were newly discovered at Block 1/2/4 in 2003.
residual recoverable reserves of 800 million tons.
415 million barrels of oil in place and 102 million barrels of recoverable oil in
place were added.
In 2003, CNPC's overseas crude oil operation production reached 25.098
million tons, with an equity production of 12.884 million tons, 3.99 million
Block 6
tons and 2.78 million tons over that in 2002 respectively. Among of them,
64.57 million barrels of recoverable oil in place and 137 million cubic meters
the crude oil operation output of CNODC was 23.05 million tons, with
of natural gas in place were proven in 2003.
equity production of 12.02 million tons, while the crude oil operation
production of PetroChina was 2.045 million tons with an equity production
of 864,000 tons.
CNPC's overseas natural gas operation production increased to 1.92
billion cubic meters, and equity production jumped to 1.39 billion cubic
Indonesia
7 exploration and appraisal wells were drilled, and all of them encountered
oil and gas discoveries, proving 33 million barrels of recoverable oil and gas
reserves.
meters, 52.6% and 79.5% respectively higher than those in 2002.
Major Discoveries
Sudan
Block 3/7
12 oil-bearing structures were discovered through progressive exploration
at Sudan Block 3/7 in 2003. Among of them, the oil-bearing area of
Palogue field discovered in Melut basin exceeded 60 square kilometers
with a largest oil-bearing thickness of 147.50 meters and an average of
approximately 60 meters, bearing over 300 million tons of oil in place. The
newly proven oil in place at Block 3/7 was 2.253 billion barrels (with a
recoverable reserves of 461 million barrels), and newly gained probable
oil in place was 539 million barrels (with a recoverable reserves of 140
million barrels) in 2003. Up to now, the accumulative proven and probable
oil in place at Block 3/7 reaches 3.07 billion barrels.
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China National Petroleum Corporation
OMMP
Annual
Report
New Blocks
In 2003, 13 overseas petroleum investment contracts were inked, bring a
North Buzachi development, Kazakhstan
crude oil production capacity of 5.5 Mt/a and a recoverable oil reserve of
310 million tons.
On June 17 and August 30, 2003, CNPC successively signed the stock
purchasing agreement (SPA) with British Nimir Petroleum Ltd. and
Gobustan exploration and development,
Azerbaijan
On January 24, 2003, CNPC purchased 62.83% of the stock shares held
Chevron Texaco Global Energy Inc. (CTGEI) on purchasing their 35%
and 65% stock shares in Chevron Texaco North Buzachi Inc. (TNBI). On
October 17, 2003, CNPC International Limited (North Buzachi) was
officially established on the basis of TNBI.
by CGL at Gobustan field. On March 26, 2003, business transaction was
completed and on April 26, 2003, CNPC actually took over the operation.
Adrar upstream and downstream integrated
development, Algeria
Gbeibe IOR, Syria
The Adrar development project is composed of field evaluation and
Gbeibe project was a public tendering project of Syria in 2003. In
development, refinery construction and management, and refined product
December 2002, CNODC won the biding in the competition with another 3
marketing. The public tendering invitation was started on May 13, 2003,
companies. In January-February 2003, petroleum contract negotiation
and CNPC won it. On July 14, 2003, CNPC and Algeria State Oil
was accomplished, and on February 18, a draft contract was signed. On
Company (SONATRACH) signed the Framework Agreement, Upstream
March 2, 2003, the development and production contract of Gbeibe field
Risk Service Contract and the Shareholders Agreement of the Refining
was signed in Damascus between Syrian Petroleum and Mineral
Company of Adrar project.
Resources Ministry, Syria Petroleum Corporation (SPC) and CNODC.
Block 350 and Block 102a/112 exploration,
Purchasing of 25.12% stock shares held by
Kazakhstan government in Aktobemunaigas
Corp. (CNPC Aktobe)
In May 2003, CNODC successfully purchased 25.12% stock shares held
by Kazakhstan government in Aktobemunaigas Corp. (CNPC Aktobe),
increasing CNODC's interest in Aktobe project to 85.42%, and thus obtain
absolute decision-making authority of the company; accordingly, the
annual equity production has increased by more than 1.2 million tons.
Bars exploration, Kazakhstan
On June 15, 2003, CNPC and British Nimir Petroleum Ltd. signed the
agreement on purchasing the total interest of Nimir Petroleum Bars
Holding BV (and subsidiary) (i.e. owner of 100% rights and interest of
Bars exploration and development blocks, Kazakhstan). After that, CNPC
acquired the 100% interest of the block.
Algeria
On December 22, 2003, CNODC and SONATRACH signed exploration
license agreement of Block 350 and Block 102a/112, with CNPC owning
75% interest of these blocks. Block 102a/112 is located in the north of
Algeria with an area of 9,923 square kilometers and Block 350 is also
located in the north of Algeria with an area of 8,666.1 square kilometers,
close to the Mediterranean Sea.
Block 11 exploration, Ecuador
Block Jabung, Indonesia
On August 11, 2003, CNPC International Limited (Amazon) was
On April 25, 2003, CNPC's subsidiary holding company, PetroChina Co.
established in Quito, the capital of Ecuador. On October 1, 2003,
Ltd., has completed the acquisition of 50% interest of Amerada Hess
Lumbaqui Oil Ltd., CNPC and Petroecuador signed an official convey-
Indonesia Holdings Ltd., a subsidiary of Amerada Hess in Indonesia, and
ance agreement. On October 7, 2003, CNPC International Limited
Petronas, Malaysia's national petroleum company, has acquired the
(Amazon) started to take over the project of Block 11 and started
remaining 50% on the same terms. Prior to this acquisition, Amerada
exploration and development activities at the block.
Hess Indonesia Holdings Co., PetroChina, and Petronas each held a 30%
interest of Indonesia's Jabung Block PSC, with the remaining 10% held by
1-AB and Block 8, Peru
Pertamina, Indonesia Oil & Gas Company. After this acquisition, interest
of both PetroChina and PETRONAS jumped to 45%, further consolidating
On July 11, 2003, CNODC and PLUSPETROL signed a Memorandum of
PetroChina's role as the operator at this block.
Understanding in respect of 1-AB and Block 8 of Peru. After 2 rounds of
negotiation, both Parties ascertained the main contents of the Stock
Purchasing Agreement (SPA) and the Shareholder Agreement (SHA). On
November 21, 2003, both Parties officially signed the Cooperative
Agreement. CNODC obtained 45% interest of PPN Company, while
PLUSPETROL, the operator, takes the rest 55% interest.
Petroleum exploration project, Niger
On November 10, 2003, CNODC and Energy and Mineral Resources
Ministry of Niger Republic signed the license agreement of Block Bilma,
whose area is 60,884 square kilometers.
Sakhalin exploration and development, Russia
On December 31, 2003, CNODC and Sakhalin Petroleum Co., Ltd.
signed a framework agreement in respect of exploration and development of Russian Sakhalin field. Presently, the agreement is waiting for
the approval of both governments.
Block H risk exploration, Chad
Block H is located in Chad Republic in middle Africa. On December 18,
2003, CNODC signed Stock Purchasing Agreement with Switzerland
Cliveden Corporation in respect of the risk exploration at Block H.
Canadian Encana Corporation is the operator of the block.
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China National Petroleum Corporation
OMMP
Annual
Report
Overseas Oil and Gas Exploration and Production
2001
2002
2003
30.02
65.48
405.60
16.230
21.112
25.098
Equity crude production (million tons)
8.288
10.108
12.884
Operation gas production (billion m3)
0.93
1.26
1.92
Equity gas production (billion m3)
0.58
0.78
1.39
New reserves (million tons)
Operation crude production (million tons)
New reserves
Crude production
Gas production
billion m3
million tons
million tons
QRM
PM
O
PSM
OQ
NKS
OTM
NU
NKO
NUM
NO
MKU
VM
S
MKQ
M
M
M
OMMM====OMMN====OMMO====OMMP
OMMM====OMMN====OMMO====OMMP
Operation production Equity production
OMMM====OMMN====OMMO====OMMP
Operation production Equity production
Refining, Chemicals and Marketing
Khartoum Refinery, Sudan
Service station project, Kazakhstan
In 2003, the Khartoum Refinery processed 2.510 million tons of crude oil,
After CNPC took over the 8 service stations and 1 refined products
producing 2.218 million tons of refined products including 858 thousand tons of
depot in September 2003, the refined products daily sales volume
gasoline, 975 thousand tons of diesel oil, 156 thousand tons of aviation
of these stations was double over that before taking over.
kerosene, and 229 thousand tons of liquefied petroleum gas (LPG). In addition,
the 1-million-ton delayed coking unit upgrade project of Khartoum Refinery was
started in 2003.
Chemical plant, Sudan
In 2003, totally 67,839 tons of liquid hydrocarbon was processed, producing
16,761 tons of polypropylene. Furthermore, a Knitting Sag Plant with an annual
productivity of 20 million was established, further extending the industry chain
Crude runs
Refined products output
and increasing the values added.
million tons
million tons
OKR
PKM
Refinery project, Algeria
On July 14, 2003, CNPC and Algeria State Oil Company (SONATRACH) signed
Shareholders Agreement of the Refining Company, which stipulates that the
OKR
OKM
OKM
contract duration of the oil refinery (SORALCHIN) is 23 years (including 3 years
of construction), CNPC holds 70% stock while SONATRACH the rest 30%. In the
NKR
NKR
20 years of production operation, the average annual crude oil processing
capacity will be 600,000 tons.
NKM
NKM
MKR
MKR
M
M
OMMM====OMMN====OMMO====OMMP
OMMM====OMMN====OMMO====OMMP
Overseas Refining and Chemicals
2002
2003
2.50
2.50
2.50
Crude runs (million tons)
2.304
2.509
2.510
Major products output (million tons)
2.053
2.214
2.218
Gasoline
0.852
0.892
0.858
Kerosene
0.115
0.169
0.156
Diesel oil
0.872
0.916
0.975
LPG
0.215
0.237
0.229
Crude processing capacity (million tons)
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China National Petroleum Corporation
2001
OMMP
Annual
Report
Storage, Transportation and Pipeline
Block 1/2/4, Sudan
Overseas Transportation and Marketing
In order to ensure the transportation of crude oil after production
stimulation, pipeline expansion project was implemented in advance. In
2001
2002
2003
addition, insufficient oil transportation capacity during peak production
Operating crude pipeline (km)
1,506
1,954
2,677
period was solved by adding pour-point depressant, effectively ensuring
Annual crude throughput capacity (Mt/a)
12.50
12.50
20.60
Annual crude throughput (million tons)
11.04
11.82
16.57
the normal production of the field, and transporting 13.89 million tons of
crude oil in 2003. After expansion, the annual crude oil throughput
capacity of the pipeline can reach 15 million tons.
Kenkijak-Atyrau Pipeline
The 448km long Kenkijak-Atyrau Pipeline was officially brought on
stream on March 28, 2003, breaking the long-existed bottleneck
restricting Aktobemunaigas Corp. to export its crude oil to European
markets.
Block 6, Sudan
Welding of the 200 km long pipeline passing through tropical rain forest
had been completed before the rainy season came, ensuring the overall
completion of the 723 km long pipeline at end of 2003 on schedule.
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6
2
7
11
12
8
1
14
4
5
13
18
16
9
17
CNPC's Overseas Oil an Gas Projects Worldwide
^ëá~
1
2
3
4
5
^ÑêáÅ~
K&K project== PSC== 50%== CNPCI
Adrar upstream and downstream integrated development=== PSC== 70%
Gobustan E & D project=== PSC== 62.83%== CNODC
Joint Operation Company
Exploration of Block 350 and Block 102a/112=== Licensing== CNPCI
Indonesia
6 blocks== 17-50%== PetroChina (5 blocks)
12 Chad
Ahdeb=== PSC== 37.50%== Al-Waha
13 Niger
Aktobe project=== Royalty licensing== 85.42%== Aktobemunaigas Corp.
14 Sudan
Block H risk exploration=== 12.50%== Encana (Canada)
Iraq
Risk exploration=== Licensing== CNPCI
Kazakhstan
(CNPC Aktobe)
Block 1/2/4 == Product sharing== 40%== GNPOC
North Buzachi=== Royalty licensing== 50%== CNODC
Block 3/7=== PSC== 41%== Petrodar
Kenkijak-Atyrau pipeline=== Joint operation== 49%== CNODC and
Block 6== PSC== 95%== CNPCI
Kazakhstan Joint-Stock Company (KazTransOil)
Khartoum Refinery== Fixed return== 50%== CNODC
Khartoum Chemical Industry Co. Ltd.=== Joint operation== 50%== CNODC
Myanmar
Myanmar Project=== PSC/EOR== CNODC
6
Petrochemical trade project=== Individual investment== 100%== CNODC
kçêíÜ=^ãÉêáÅ~
Oman
Block 5== PSC== 50%== Joint Operation Company composed of
Project in Canada=== UTF test == 100%== CNPCI
pçìíÜ=^ãÉêáÅ~
Syria
Gbeibe=== PSC (EOR)== 100%== CNODC (1st phase for pilot trial production);
17 Peru
Block 1-AB/8=== Royalty licensing== CNPC purchased 45% interest of Pluspetrol
Thailand
Nortre SA and 55% interest of Resource Corporation Pluspetrol
Block 6 and 7=== Royalty licensing== 100%== China South American Petroleum
Turkmenistan
Project of Gumda field=== Technical services== CNPC International Limited (CNPCI)
bìêçéÉ
Exploration Tech. Co. (SAPET)
18 Venezuela
Caracoles and Intercampo=== Risk service== 100%== CNODC
10 Russia
Orenburg project=== Royalty licensing== 61.80%
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Exploration of Block 11== CNPCI
Block Banya=== Lease== 100%== China Petroleum Hong Kong (Holding) Limited
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Orimulsion oil project=== Joint operation== 70%== CNODC and PDVSA
Projects Types Stock share Operator(s)
China National Petroleum Corporation
development & production) with each side holding 50% interest respectively.
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16 Ecuador
The joint operation company composed of CNODC and SPC (2nd phase for oilfield
8
15 Canada
CNODC, China Petroleum Hong Kong (Holding) Limited and Oman MB Group
7
11 Algeria
Azerbaijan