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APPENDIX Chart 1: History of China's Petroleum Industry 1950: The General Bureau of Petroleum Administration was established, subordinate to the Fuel Industry Ministry FIM and in charge

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APPENDIX

Chart 1: History of China's Petroleum Industry

1950: The General Bureau of Petroleum Administration was

established, subordinate to the Fuel Industry Ministry (FIM) and

in charge of construction and production for China's petroleum

industry

July 1955: The Petroleum Industry Ministry (PIM) was

established

June 1970: The three ministries of the petroleum, coal and

chemical industries were incorporated into Fuel and Chemical

Industry Ministry (FCIM)

February 1975: The Fuel and Chemical Industry Ministry (FCIM)

was dissolved and Petroleum and Chemical Industry Ministry

(PCIM) was established

February 1982: China National Offshore Oil Corporation

March 1978: The Petroleum and Chemical Industry Ministry

(PCIM) was dissolved, and the Petroleum Industry Ministry (PIM)

Petrochemical Corporation (Sinopec)

September 1988: China National Petroleum Corporation (CNPC)

was established on the basis of the former Petroleum Industry

Ministry The newly founded CNPC served as the State oil

company, focusing on upstream operations while also assuming

some governmental functions and responsibilities

July 1998: In accordance with reforms approved by the First Session of the Ninth National People's Congress, CNPC and Sinopec were restructured into integrated oil companies

Source: According to CNPC, The History of CNPC, with changes See:

http://www.cnpc.com.cn/english/gsgk/lsyds_cnpcls.htm and http://www.cnpc.com.cn/gsgk/lsyds.htm#07

Table 1 Selected Investment by Chinese Oil Companies in Overseas Oil Exploration and Production

Coutry Date Company Project

Value (US$ million)

Algeria 2002 Sinopec 75% stake in the Zarzatine field 394

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Australia 2003 CNOOC assets acquisition agreement on Australian Northwest

Continental Shelf Natural Gas Project 348 Azerbajan 2002 CNPC 30% stake in the Kursangi and Karabagli oil fields from the

European Bank for reconstruction and development 52 Canada 1991 CNPC UN-sponsored oil sands development

Canada 1993 CNPC

Equity stake in North Twining oil field in Alberta, Saskatchewan, Canada This field produced the first barrel of overseas crude in China's history

Ecuador 2003 CNPC CNPC Amazonia purchased rights to Block 11 from Lumbaqui

Oil, subsidiary of Romania's Rompetrol Indonesia 1993 CNOOC 32.58% stake in a block in the Straits of Malacca from ARCO Indonesia 1995 CNOOC Additional 6.93% stake in a in a block in the Straits of Malacca Indonesia 2002 CNOOC

Ltd Assets of Repsol-YPF 585 Indonesia 2002 CNOOC purchased an equivalent 12.5% stake of Tangguh Liquefied

Natural Gas Project in total from BP 275 Indonesia 2002 PetroChina Assets of Devon Energy 262

Indonesia 2003 PetroChina

Half the assets of Amerada Hess Indonesia Holdings Co

Amerada Hess has a 30% stake in the Jabun Block on Sumatra, which has proven reserves of 267 million barrels of oil

equivalent in six oil and gas fields

82

Iran 2001 Sinopec

Production sharing contract with National Iranian Oil Company for a joint exploration and develoment of an oil and gas block in the Zavareh-Kanshan region Sinopec is the operator

13

Iraq 1997 CNPC Production sharing contract to develop al-Ahdab field 1200 Kazakhstan 1997 CNPC 60.2% stake in Aktyubinsk Oil Co 4300 Kazakhstan 1997 CNPC Contract to develop Uzen oil field 1300 Kazakhstan 2003 CNPC Additional 25.12% stake in Aktyubinsk Oil Co 150.16 Kazakhstan 2003 CNPC purchased 35% stake in the North Buzachi oil field from Nimr

Petroleum (Saudi Arabia) Myanmar 2001 CNPC Agreement for enhanced oil recovery work at the Pyay (Prome)

oil field CNPC will receive 40% of the output Nigeria 1997 CNPC Agreement for exploration of the Chad Basin with the Nigerian

National Petroleum Corporation Nigeria 1998 CNPC Two exploration blocks in the Niger River delta Papua New

Guinea

1994

1995 CNPC

Two exploration blocks offshore of Gulf Province in 1994 (Block 160) and 1995 (Block Kamusi) Peru 1993 CNPC Operation rights for enhanced oil recovery in the Talara oil field 25

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Sudan 1995 CNPC Production sharing contract for Block 6 in the Muglad Basin Sudan 1997 CNPC Production sharing contract for Blocks 1/2/4 in the Muglad

Sudan 2000 CNPC 23% stake in Block 3/7 in the Muglad Basin Thailand 1993 CNPC Production sharing contract to develop the Banya block Venezuela 1997 CNPC Intecampo Norte and Caracoles blocks, enhanced oil recovery

Yemen 2001 Sinopec Agreement with the German firm Preussag for risk exploration

Yemen 2003 Sinopec

Memorandum of understanding with the Yemeni Oil Mining Ministry to explore for oil in the Amakeen region of Shabwah Province

10

Map 1 Russian Far Eastern Oil Pipelines

Source: Adapted from “The oil wars: in the pipeline,” The Economist, May 1–7, 2004

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Map 2 Sino-Kazakhstan Oil Pipeline

Source: F William Engdahl, “China Lays down Gauntlet in Energy War: the geopolitics of oil,

Central Asia and the United States,” Asian Times, 22 December 2005

Chart 2 Roles played by Government & NOC and the Resulted Approach

Government's

Primary Role Internal Stabilizer

Economic Efficiency Promoter

Internal Stabilizer both roles

Approach of Oil

Pricing Reform

State -controlled Approach (SCA)

Market-dominated Approach

Mixed Approach

NOC's Primary Role

State Policy &

Social Obligation Undertaker

State Policy

& Social Obligation Undertaker (SPSOU) both roles

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Project Decision Stage

Negotiation &

Implement Stage Government's

Primary Role Internal Stabilizer

Economic Efficiency Promoter

Approach in

NOC's Primary Role SPSOU Market Actor

1997 striving for the pipeline

1999 shelving the pipeline

2003 restart the pipeline

Government's

Primary Role Internal Stabilizer

Economic Efficiency Promoter Internal Stabilizer

Approach in

Sino-Kazakhstan Oil

NOC's Primary Role SPSOU Market Actor Market Actor

1st stage:

Impassive to Russia's proposal 2nd stage:

3rd stage: Japan's involvement since

2002

Government's

Primary Role

Economic Efficiency Promoter Internal Stabilizer Internal Stabilizer

Approach in Russian

NOC's Primary Role Market Actor Market Actor SPSOU

Government's Primary Role

Economic Efficiency Promoter

Approach in Acquisition

NOC's Primary Role Market Actor

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