China hits milestones amid continued glut

China

BEIJING, January 13, 2017 – China imported 8.57 million bopd in December 2016, its highest level on record, data compiled by Chinese General Administration of Customs on Friday showed.

The figures on China’s record crude imports seen by Reuters are 9% higher than the previous record, which was set in September 2016, at 8.04 million bopd. Looking at annual imports, China in 2016 imported 13.6% more crude compared with 2015, reaching 912,000 bopd.

Imports are forecast to rise by around 600,000 bopd in 2017, with 66% of that volume being attributed to independent refineries – or teapot refineries. CNPC forecasts that China’s demand for crude oil will reach 12 million bopd in 2017 – an increase of 3.4%.

Monthly refined products exports rose to around 5.35 million tonnes (39.2 million barrels) in December 2016, 25% higher compared with the previous year and higher still than the November figure of 4.85 million tonnes (35.6 million barrels). However, a reversal on export quotas for teapot refiners by the Chinese government will see state-owned operators dominate the export market once again in 2017.

Fuel exports continued to grow for a third consecutive year reaching 48.3 million tonnes (354 million barrels) annually, however fuel imports decreased by around 6.5%.

In other news, production at the offshore Penglai 19-9 oilfield began on Thursday. The comprehensive adjustment of the asset will include the construction of an additional wellhead platform. All told, the development will have 57 production wells up from only two currently operating wells. With work forecast to be completed in 2019, production is expected to rise from levels of 750 bopd at present to 13,000 bopd.

CNOOC and ConocoPhillips hold 51% and 49% interests in the asset, respectively, with CNOOC acting as the operator.

Image courtesy of ConocoPhillips