China | World | Business | Entertainment | Sports | Photos
    Home>>Business

Sinopec to close four oilfields in Shandong

来源:China Daily 作者: 2016-02-18 13:53:34

  Workers check facilities at the Shengli Oilfield near Dongying, Shandong province. The oil producer is to shut down four oilfields to reduce costs amid plummeting oil prices. [HU QINGMING / FOR CHINA DAILY]

  Closures are first in production base in more than five decades

  China's second-largest oil major will shut down four oilfields in the country's eastern Shandong province to stay afloat amid plummeting oil prices.

  China Petroleum & Chemical Corp, also known as Sinopec, will close the four oilfields in the Shengli oilfield, the nation's second-largest oilfield, later this year, company sources said. It will be the first shutdown after the first barrel of oil was pumped from the Shengli oilfield more than five decades ago.

  The four oilfields are the least profitable projects in the area, sources said.

  The closures signify a dramatic fall for the company. The Shengli oilfield, once one of the most profitable oil companies in China, reported about 9.2 billion yuan ($1.4 billion) in losses last year as global oil prices have fallen sharply over the past year.

  Since June, global oil prices have fallen by more than half, with Brent crude oil currently below $30 a barrel for the first time since May 2009.

  Experts said the sharp fall in global oil prices have led to revenue shortfalls for many energy majors in the world.

  The Daqing oilfield, the largest oilfield explored by China's major oil and gas producer China National Petroleum Corp, reduced crude oil production in 2015 for the first time in seven years.

  It produced about 38.4 million metric tons of oil last year, about 1.5 million tons lower than in 2014. Located in Northeast China's Heilongjiang province, the oilfield will further cut its production to 32 million tons by 2020.

  According to official data, the average cost of oil production in China is roughly $40 a barrel. Experts said many oil producers failed to reach a profit when oil prices dropped under $30 a barrel.

  "Many oil producers are facing the same kind of problem when crude prices fall," said Gao Jian, a crude oil analyst at Shandong-based consultant SCI International.

  "It is normally the last straw when oil producers shut down oilfields because after the shutdown, if they wanted to reopen them, they could stand to lose millions of dollars per day," he said.

  He said more rigs could begin to see a fall in production this year.

Keywords:oil,Sinopec

editor:李雪曼
 China's last gun-toting tribe China's last gun-toting tribe Some 2,500 residents of Basha Miao ethnic village in southwest China continue to preserve the traditional way of life .
Women hold up half the sky, but men own homesWomen hold up half the sky, but men own homes Why do housing prices keep hovering at high levels, if not continuing to soar in Chinese cities?
Chinese Movie Boom in 2016Chinese Movie Boom in 2016 In 2015, China's movie industry witnessed progress in almost every aspect of filmmaking.
China's Urbanization Choice: A Bet on ProsperityChina's Urbanization Choice: A Bet on Prosperity China recently hosted a strategic conference in its contemporary history of urban development of the last three decades.
Commentary: Resumption of China-Japan-South Korea summit conducive to solving Korean Peninsula issue Commentary: Resumption of China-Japan-South Korea summit conducive to solving Korean Peninsula issue The sixth China-Japan-South Korea leaders' meeting started in the South Korean capital of Seoul on Sunday, resuming the trilateral cooperation mechanism after a three-and-a-half-year suspension.
Premier calls for joint efforts to stabilize Korean peninsula Premier calls for joint efforts to stabilize Korean peninsula Premier Li Keqiang urged for joint efforts to stabilize the situation on the Korean peninsula to continue during his meeting with President of the Republic of Korea Park Geun-hye in Seoul on Saturday.
1 2 3 4 5 6