Offshore staff
OSLO, Norway – Chinese President Xi Jinping has sought to address tariff tensions between the US and China in his speech at the Boao Forum.
According to Rystad Energy, a commitment to cut tariffs and open the Chinese economy could be a first step in attracting greater foreign investment.
Rystad estimates that US-headquartered E&P companies produce collectively 75,000 b/d of oil and 200 MMcf/d in China.
The main producers are ConocoPhillips and Chevron. ConocoPhillips’ current involvement in the offshore Peng Lai and Panyu projects nets the company close to 50,000 b/d, while Chevron’s interests in the Bo Zhong, Qinhuangdao, and Huizhou projects amount to more than 20,000 b/d.
Chevron also operates the Chuandongbei project which delivers 115 MMcf/d of gas.
“While Chevron’s Chinese volumes are not massive, the company still uses large investments to maintain its production. We estimate that the Chuandongbei project alone will require $205 million gross annually over the next three years to maintain the current production level,” said Matthew Fitzsimmons, VP Research at Rystad Energy.
In 2014,US sanctions imposed against Russia halted stalled ExxonMobil’s investment in the Kara Sea, the analyst pointed out, leading the company to withdraw from the project and forgo developing 12.3 billion metric tons (13.56 billion metric tons) of oil and gas condensate in the region had to offer.
Last week ExxonMobil revealed that the withdrawal had resulted in a $200 million after-tax loss.
“While the current tariffs between China and the US do not show that level of consequence, there are still millions of dollars on the line for E&P companies from both nations,” Fitzsimmons said.
“They will certainly need to monitor the tensions until the two super-powers stop escalating their targeted tariffs and reach a more formal consensus than through Twitter.”
04/12/2018
