GlobalData: China's Quest for Energy Security - Chinese NOCs Emerging as Key Competitors to Global Oil and Gas Companies

Global Data’s new report, China's Quest for Energy Security - Chinese NOCs Emerging as Key Competitors to Global Oil and Gas Companies analyses the growth and expansion of China’s National Oil Companies (NOCs) in the global oil and gas market aimed at securing the future energy needs of the country. The report highlights the widening demand-supply gap in China’s primary energy sector and the country’s efforts to bridge the gap through imports. The report details overseas projects and Merger and Acquisition (M&A) activities of China’s NOCs in various countries across the world. The report also traces the growth and integration of China’s NOCs both in their domestic and foreign markets, with a focus on factors that are driving the overseas expansions of China’s NOCs.

The report delves deep into the competing strategies adopted by China’s NOCs to beat competition to acquiring oil and gas assets in foreign markets. It compares the growth of China’s NOCs with Internation Oil Companies (IOCs) in terms of operational parameters and financial parameters. It also discusses in detail the major acquisitions of China’s NOCs in global energy markets in recent years. The impact of China’s overseas growth on NOCs from other developing countries has also been analyzed in the report, with a focus on major M&A activities by different NOCs

Increasing Gap Between Consumption and Domestic Production in China Necessitates Import of Oil and Gas

China’s energy consumption has grown significantly during the period 2000-2009. Spurred by the country’s rapid industrialization and urbanization, its energy consumption reached record highs and China has emerged as the second largest energy consumer globally. China’s oil and gas consumption grew at an Annual Average Growth Rate (AAGR) of 6.8 % during the period 2000-2009. It is expected to grow further at an AAGR of 2.5% during the period 2010-2020.The growing energy consumption will result in China‘s energy imports increasing substantially, and by 2020 63% of China’s total consumption will be met through imports. This rising energy consumption coupled with limited domestic supply has forced China’s NOCs to look towards importing oil and gas supplies. Over the years, China’s NOCs have made numerous acquisitions in Nigeria, Angola, Sudan, Iraq, Brazil and the Caspian region. As a result, China’s production from overseas oil and gas has increased considerably. To meet its escalating demand, China’s NOCs continue to expand and by 2020 their overseas assets will contribute to more than half of China’s oil consumption.

China’s NOCs Have Spent More Than $50 Billion in Overseas Projects During the Period 2005-2010

China’s NOCs have emerged as the most active investors in overseas oil, and gas projects. With a foreign cash reserves in excess of $2 trillion and ready availability of credit from state banks, China’s NOCs have acquired a number of assets in countries like Sudan, Angola, Nigeria ,the Middle-East, the Caspian region and the countries of Latin America. During 2005-2010, China’s NOCs together spent more than $52billion in overseas projects. Moreover, these NOCs have spent billion of dollars on providing soft loans, foreign aids and infrastructure building like railways and electrical infrastructure across different oil and gas -rich countries in Africa. CNPC has spent the largest amount, a sum of $19 billion in overseas projects, followed by Sinopec Ltd, which has spent $13.8 billion during the same period. These NOCs with their financial prowess and government support will continue to invest in foreign assets, thereby ensuring steady supply of oil and gas to meet the increasing domestic demand

China’s State-Backed, Cash-Rich NOCs Giving Tough Competition to IOCs and NOCs from Other Developing Countries in The Quest to Increase Their Global Footprints

China‘s NOCs got a major revamp in 1998 when the oil and gas industry of China underwent restructuring. The restructuring resulted in the formation of three integrated oil and gas companies and their redistributed assets. These three companies - CNPC, CNOOC and Sinopec, ventured out and invested in overseas projects through M&As and partnership deals. Due to their concerted efforts, state support and sound liquidity these companies have expanded their operations into a number of countries. CNPC has operations in 29 countries, while CNOOC and Sinopec have operations in 20 and 12 countries. The oil and gas reserves of these companies have increased due to extensive Exploration and Production (E&P) activities in foreign countries. PetroChina Co Ltd has the second largest oil and gas reserves globally. As a result of such deals the oil and gas production from these NOCs have increased considerably in the last few years. Their assets have grown enormously and China’s NOCs are well positioned to compete with major IOCs. China’s NOCs continue to increase their global footprints with growing overseas operations and successful foreign investments and in the process have also edged out NOCs from other developing countries in competitive bidding for oil and gas assets across different countries. India’s Oil and Gas Corporation Limited (ONGC) lost out to China’s NOCs on numerous occasions. ONGC failed to acquire oil assets in Nigeria and Angola in Africa due to its relatively lower investments in the form of loans, infrastructure spending and foreign aids compared to China.

GlobalData: China's Quest for Energy Security - Chinese NOCs Emerging as Key Competitors to Global Oil and Gas Companies:
http://www.reports-research.com/market-surveys/chinas-quest-energy-security-chinese-nocs-emerging-competitors-global-companies-p-128753.html

GlobalData: More market data and market reports:
http://www.reports-research.com/market-surveys/globaldata-m-304.html

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