Shulou(Shulou.com)11/24 Report--

This article comes from the official account of Wechat: Earth knowledge Bureau (ID:diqiuzhishiju)

The original title: "at present, China is very short of oil!" "

Black gold, the blood of industry, the trump card of the local tycoons of the Middle East, the king of commodities.

Oil, as the most important energy for mankind since the 20th century, has had a profound impact on the course of history and influenced the life and death of the political power. Oil supported the rise of the United States and the Soviet Union and stuck in the throat of Nazi Germany and Japan. Small countries such as Brunei and Norway were extremely rich, and brought the doom of overthrow to Iraq and Libya.

Oil has promoted the development of cars, trains and airplanes

It has also promoted the rise of many oil resource countries.

For modern countries, whether there is a solid oil supply or not is a matter of national luck.

Once upon a time, China was still an oil exporter. With the commissioning of Daqing, Shengli, Karamay and other large oilfields, China's crude oil output soon exceeded 100 million tons. From 1973, China even exported crude oil to Japan for foreign exchange, until 1993, the exporting country became an importing country, and China's oil consumption in the same year was 150 million tons.

As a result, cities such as Daqing have become famous "oil cities" in China.

Just 17 years later, by 2010, China overtook the United States to become the largest manufacturing country in the world, with oil consumption reaching 440 million tons. In 2022, oil consumption reached a staggering 710 million tons, accounting for 15% of global production, second only to the United States, 820 million tons, but unlike the United States, our oil is heavily dependent on imports. Imports accounted for more than 70% of the 710 million tons in 2022.

The oil we extracted by ourselves is not enough at all.

And oil is not only the lifeblood of industry, but also the lifeblood of agriculture and logistics, so tapping oil production capacity and ensuring oil imports have a very high strategic priority.

Why is China so short of oil? Is there any solution? Today we are going to talk in detail about the problem of oil shortage in China.

Our own oil is not enough for our country's oil shortage predicament, first of all, it comes from the wide gap between reserves, production and consumption.

According to data from the Ministry of Natural Resources ("National Mineral Resources reserves Statistics 2022"), China's oil reserves will be about 3.8 billion tons in 2022, accounting for only about 1.58 percent of the world's reserves, ranking 13th in the world.

Horizontal screen, regardless of reserves or production

Countries in the Middle East are well-deserved oil tycoons, ▼.

Based on such small reserves, China is still the world's sixth largest oil producer, but this is still not enough in the face of demand.

▼

According to the report of OPEC in December 2022, China consumes 14.79 million barrels of crude oil per day, the second largest in the world.

It is equivalent to achieving the sixth output with the 13th reserves in the world, but to meet the second demand in the world, our per capita oil consumption is much lower than that of the United States, and three Saudi Arabia are not enough to catch up with each person.

Intuitive comparison of ▼

The fundamental reason for such a lack of oil is that talent is not available.

In theory, as long as there are large-scale ancient sedimentary basins, it is possible to produce "oil and gas generation areas", in which are oil and gas fields. The Gulf of Mexico, Lake Maracaibo, Saudi Jawal and Alaska's North Slope oilfields are typical examples.

Oil and natural gas, transformed from organic matter to ▼

Take the Maracaibo Lake oil region in South America as an example ▼

Large sedimentary basins are usually formed in the ocean, while sedimentary basins in China are mainly formed by lakes on land. You can imagine the difference between the size of the sea and the lake, and the amount of resources of the two is not the same order of magnitude.

Classification of different sedimentary facies ▼

And in the geological evolution, most of the sedimentary basins in China have been seriously damaged and the geological structure is fragmented.

Geologists have compared the strata of the sedimentary basin to a plate, which is intact in most oil-producing countries, while the sedimentary basin in China is a broken plate that has been stepped on several feet after it is broken. Therefore, if we go on drilling, we may only hit a small piece of the target layer, and the amount of oil and gas produced must be very small and the production cycle is relatively short.

If there is a sedimentary basin, it is possible to have oil and gas ▼.

Another disadvantage is the buried depth of oil, which is generally deep in China.

For example, oil wells in Xinjiang are generally drilled to a depth of seven or eight thousand meters, and it is not possible to reach oil at such a depth. Countries with good crude oil endowments in the Middle East, Central Asia and Australia generally have a depth of one or two thousand meters, and the output and quality of crude oil are very high.

Horizontal screen, to envy the "oil everywhere" ▼ in the Middle East.

The lifeline of Saudi Arabia, the "Gaval Oilfield", has a production depth of 2200 meters, proven reserves as high as 10.74 billion tons, nearly three times that of our country, and the cost is as low as less than US $10, hitting the world.

Plenty of oil is easy to extract, no wonder Saudi Arabia is full of local tycoons ▼

Our ability to drill nearly 10,000 meters of wells in the desert (at present, the deepest drilling depth in China is 9010 meters) is certainly a manifestation of technical strength, but it is also a helpless move under the endowment of resources. In terms of the cost and performance-to-price ratio of crude oil exploitation, imports are often much more cost-effective than our own production.

In fact, China also has oil fields with shallow depth and large production, but they are basically old oil fields that have been exploited for half a century, and they have reached the edge of being "squeezed dry." the comprehensive water cut of Daqing Oilfield has reached 95%, and stable production is very difficult, and the output is decreasing year by year. I can only "scrape the bottom of the barrel" as far as possible.

Daqing Oilfield has been on duty for a long time.

However, the large oil fields explored in recent years are generally difficult and costly. For example, Mahu Oilfield, located in the high elevation area of 3000 meters above sea level, belongs to dense conglomerate oil fields, and the oil is hidden in rock pores that are invisible to the naked eye. It is a world-class problem to fully develop this kind of oil field.

Map of geotectonic location of Mahu sag and its periphery (a)

Construction unit drawing (b) and cross section view (c) ▼

In fact, with the exception of a few countries like Saudi Arabia, the world is facing the problem that shallow oil and gas reservoirs have been exhausted, and the follow-up of old oil fields is generally weak. Although the prediction that the oil will soon be tapped out has not come true, the drilling is getting deeper and deeper, extending from the shallow layer to the deep and ultra-deep layer. In recent years, 60% of the world's new oil and gas reserves come from deep strata.

Although our production technology is also improving, we can drill wells nearly 10,000 meters deep, and we have made breakthroughs in unconventional oil and gas resources such as shale oil, shale gas, coalbed methane and dense limestone gas, but it is limited by technology and cost. it is still very difficult to increase production on a large scale.

Different types of oil and gas wells indicate ▼

It can be seen that even if we master the technology of shale oil, oil sands and deep-sea oilfields, it is very difficult to produce in the short term, and we still have to import it.

The dilemma of super buyers the international warning line for external dependence on crude oil is 50%. China has exceeded this line for many years, and its imports account for 1/4 of global imports, making it a super buyer.

Our oil imports are almost always increasing, ▼.

Since we are super buyers, we should expand and maintain our sellers to avoid getting stuck by a single source. Fortunately, the focus of the world's crude oil production is also in Asia, which is relatively close to us.

This partnership can be seen clearly in the lights of the earth at night. From East Asia to Southeast Asia and South Asia, almost all of the lights of these monsoon countries come from huge populations, cities and industries. The Middle East, Central Asia and Siberia, the "western region of Asia", have a lot of light from oil and gas fields. Through oil tankers and pipelines, mutually beneficial cooperation at the continental level has been realized between Asia's two major economies.

Without oil, the lights in the Middle East would be much dimmer than they are now.

China is a key part of the buyer camp, but not all. India, which also belongs to the monsoon region, has a higher degree of dependence on crude oil as high as 85%, so it attaches great importance to its relationship with the Gulf countries. Last year, it was crazy to buy low-cost Russian crude oil, and its import composition is also quite similar to that of China.

22 years ago, 60% of India's crude oil imports came from ▼ in the Middle East.

In 2022, China's crude oil imports cost 2.43 trillion yuan, Saudi Arabia first, Russia second, sold us more than 80 million tons. It was followed by Iraq, the United Arab Emirates, Oman, Malaysia, Kuwait and Angola.

▼

This import mix is constantly changing. after all, the supply of many major oil-producing countries is unstable, which is closely related to geopolitics. for example, due to international sanctions and political instability since 2019, we have greatly reduced our imports of crude oil from Iran and Venezuela, but fortunately there are still many sources of replacement.

However, even with a relatively stable import mix, the rise and fall of international oil prices have a great impact on economic security. For example, when international oil prices plummeted in 2014-2016, China's crude oil import costs dropped significantly. In 2019, a sudden drone attack on Saudi oil facilities led to a surge in global oil prices.

"A successful attack on Abqaiq

Similar to a massive heart attack in the oil market and the global economy. "▼

The mode of importing resources and exporting manufactured goods in East Asian countries is very sensitive to the price fluctuations of resources, especially in the era of turbulent situation and frequent conflicts.

Therefore, it is very necessary for China to import a large number of imports at the end of 2018 when the oil price is low, expand its strategic reserves, and sign a long-term contract with Russia for more than 30 years.

Signed in 14 years, the contract lasted for 30 years, and finally reached 38 billion cubic meters per year.

From 18 years on, Russia began to supply gas to China through the eastern line of the Sino-Russian natural gas pipeline.

(figure: Reuters) ▼

Leaving aside the relatively distant producing areas such as Venezuela and Nigeria, the relatively recent oil-producing regions in western Asia are also facing the risk of geopolitical upheaval on a daily basis, and it is of great significance to maintain peace in the region in order to consolidate the cooperative relationship at the continental level between the two major economies.

The locals were worried that they might accidentally refine oil for the rebels.

Even if the problem of the source of imports is solved, how to transport it is still a problem.

Pipeline transportation is relatively stable, but the construction is not easy, the pipeline to Russia and Central Asia is relatively easy, it is difficult to repair directly to the Middle East, and the capacity of the pipeline is limited.

Therefore, the problem of shipping is still unavoidable. In the previous videos of the Strait of Malacca and the Arctic Ocean route, we talked in detail about this problem. The Arctic Ocean route is not realistic in the short term. The shortcut from Pakistan-Gwadar Port and Burma-Kyaukyo Port is also difficult to form capacity, and the Kala Canal is even more unreliable.

Most of the oil imports of East Asian countries go through the Malacca Strait ▼.

Therefore, the Strait of Malacca can not be bypassed. Many people are worried that there will be a neck jam here. In fact, there are many places where the neck can be jammed, such as the Strait of Hormuz, not to mention that there is such a big India in the middle. This shows the importance of sea power, and as a super buyer, it is not easy for China to maintain the supply of crude oil.

As the "throat of the Gulf", the Strait of Hormuz is often tense.

Solution: what can we do to increase revenue and cut expenditure in the face of such poor resource endowment and unstable import situation?

The specific measures are nothing more than opening up sources and reducing expenditure.

To open source, the first thing is to reduce our over-dependence on specific countries and increase our import sources, especially those countries with rich oil resources and underdeveloped economies, such as Angola, Congo (Brazzaville) and Kazakhstan. China participates in oil exploration and production through investment and joint ventures to ensure stable import channels.

Construction sites invested by Chinese enterprises in Angola

Distant port ships are loaded with oil waiting to be exported.

At the same time, China's own oil production capacity can also be tapped. Through advanced exploration and production technology, our oilfields can live as long as possible and reduce unnecessary waste. The potential of shale oil, oil sands and deep-sea oil fields is also great, the proportion is not high now, but it will be higher and higher in the future.

Part of the effort to develop unconventional types of oil

In fact, we still have a lot of room for development.

In terms of saving energy, it is extremely difficult to reduce the overall energy consumption, but the diversification of energy structure is the key and has great potential.

In the past five years, the proportion of renewable and clean energy represented by wind, solar, hydropower and nuclear energy has increased by 5% (from 20.8% to 25.9%). But oil accounts for only 3.1% of our power generation structure, while coal accounts for 36.5%.

The use of renewable and clean energy is the general trend of ▼

After all, we are a country short of oil, and we do not use much oil for power generation, but we use a lot of oil in transportation and industry, so if we look at the current trend of electric vehicles, we are actually indirectly replacing oil with other energy sources. The background of the lack of oil is obvious. If consumption cannot be controlled, the gap between output and consumption, as we mentioned at the beginning, will widen.

So now the society is vigorously promoting new energy vehicles.

It's not unreasonable.

The combination of these measures may help China make a smooth transition to the next relatively independent energy structure. after all, with the continuous innovation of technology, the status of oil is not eternal, and the local tycoons in the Middle East do not want to sit back and do nothing. They are also stepping up efforts to prepare for the post-oil era.

In short, if we want to completely solve the problem of lack of oil, we can only wait until oil is no longer so important. It won't be too close, but it's not very far away, maybe in my lifetime.

Reference:

1. "China's Rising Oil Demand and Its Impact on Global Oil Prices"-Sarah Liao and Milton Russell, The Energy Journal, 2019

two。 "China's Oil Security: Imports and the Changing Geopolitics of Global Oil"-James Henderson and Xunpeng Shi, The Royal Institute of International Affairs, 2018

3. "China's Crude Oil Imports Just Shy of 11 Million bpd in September"-Reuters, October 2021 https://www.reuters.com/business/energy/chinas-sept-crude-oil-imports-rise-32-yr-1106-mln-bpd-2021-10-13/

4. "China's Oil Demand Growth to Slow in 2021"-slap Global Platts, November 2020

Https://www.spglobal.com/platts/en/market-insights/latest-news/oil/111220-chinas-oil-demand-growth-to-slow-in-2021#:~:text=China's%20oil%20demand%20growth%20will,gasoline%20consumption%20this%20year's%20gains.

5. "China's Crude Oil Output Drops 1.3% in 2020"-Xinhua, January 2021 http://www.xinhuanet.com/english/2021-01/18/c_139674745.htm

6. "China's Growing Oil Demand and Geopolitical Challenges"-Council on Foreign Relations, September 2019

Https://www.cfr.org/report/chinas-growing-oil-demand-and-geopolitical-challenges

7. 2023 Analysis report on the current situation and Development trend of Petroleum Industry, https://www.jingyanben.com/ gerenbaogao / 86316.html?page=1

8. This year, China's oil consumption is expected to reach 756 million tons, an increase of 5.1%. China Petroleum News Center, http://news.cnpc.com.cn/ system / 2023/03/29/030097168.shtml

9. Here comes the global sea crude oil jigsaw puzzle! China is still the world's largest importer of crude oil

Http://www.zgsyb.com/news.html?aid=653321

10. Analysis on the present situation of Petroleum Exploration Industry 2023

Https://www.chinairn.com/hyzx/20230524/170016926.shtml

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