China intends to oust dollar from oil trade

China is planning to launch its own oil benchmark in October, similar to Brent and WTI, striving for a more important role in establishing crude prices. Unlike the Western benchmarks, the Chinese contracts will be nominated in the yuan, not the US dollar.

Shanghai International Energy Exchange sent a draft futures contract to market players in August, Reuters reported quoting sources. Continue reading

China discovers enormous gas field in South China Sea

The world’s largest net oil importer, China National Offshore Oil Corporation, has announced the discovery of 100 billion cubic meters of natural gas field in the South China Sea.

China’s state news agency Xinhua reported late Monday that a deepwater drilling rig had discovered Lingshui 17-2, the country’s first self-support deepwater gas field, in September 2014 and it has since been approved as a large-scale gas field. Continue reading

US watches as Beijing forges ahead with S China Sea oilfield plans

China’s recently published Resource Development Strategic Action Plan (2014-2020) says the country plans to establish a large oilfield in the disputed South China Sea in the next six years capable of producing around ten million tonnes of oil a year, according to Duowei News, a media outlet run by overseas Chinese.

From the end of 2013 China has accelerated land reclamation projects in the area, with Fiery Cross Reef, which is also claimed by Vietnam, the Philippines and Taiwan, being expanded to 0.9 square kilometers as of Oct. 16, making it now the largest island in the disputed Spratlys. Estimates based on a satellite image taken on Nov. 17 suggest that the reef has now grown in area to 1.3 square km and that the reclaimed land is structured like a landing strip. Under previous administrations China had pushed for the shelving of disputes and the joint exploration of resources in the region by claimant nations out of diplomatic considerations, Duowei stated. Due to the land reclamation projects and moves to build airports as well as calls for bids to exploit oil resources by other claimants, however, the shelving of disputes is no longer on China’s agenda. Under Xi Jinping’s leadership, there has been an increased military presence in the region and moves that suggest China is moving forward with its plans to exploit resources. Continue reading

China eyes post-Chavez oil axis

China is set to overtake the United States as the world’s largest importer of oil this decade. While the expansion of China?’s economy has slowed from a breakneck 10% yearly rate to a still-formidable 7% per annum, the economic metamorphosis of the Middle Kingdom is having huge impacts on global energy markets.

The growing ranks of China’s middle class increasingly aspire to a lifestyle – and level of consumption – that approximates the patterns of their counterparts in the world’s richest countries. The death of Venezuelan president Hugo Chavez has further highlighted China’s need for the lifeblood of a modern economy and the economic and geopolitical threats China’s dependence on imported energy hold for the leadership in Beijing.  Continue reading