Top Chinese oil firm CNPC said it would increase crude processing, halt refined oil products exports and increase imports in the third quarter to boost supply to the domestic market.
The recent fuel price hike helped ease domestic shortages to some extent, “but the outlook for fuel supply is not optimistic given that international oil prices, far above domestic ones, still have room for further rises”, it said on its Web site (news.cnpc.comc.cn).
China lifted fuel prices by nearly 20 per cent on June 20, the first increase in eight months and the largest-ever hike. However, refiners are still bearing losses and some industry officials estimate their deficits remain above 1,500 yuan ($218.6) for each tonne of oil products produced.
CNPC, parent of PetroChina, said its crude processing in the third quarter would increase 880,000 tonnes, or 70,600 barrels per day (bpd), from a year earlier and oil products output would rise 580,000 tonnes, without providing the previous year’s levels.
Most of CNPC’s refining businesses are operated by PetroChina, which processed 2.23 million bpd in the third quarter of 2007, 7.8 per cent more than the same period in 2006.
CNPC said that imports of refined oil products are expected to reach a record high this year. It did not elaborate on volumes or varieties, but PetroChina said earlier this month it has planned a record 2.4 million tonnes of diesel imports this year.
CNPC said it also aimed to provide 1.25 million tonnes of crude oil in the third quarter to independent refiners and buy back 500,000 tonnes of oil products to boost market supply.
Independent refiners, which account for around 15 per cent of China’s total processing capacity, have no direct access to the crude oil market, which is controlled by state-owned oil majors.
CNPC and Rosneft have entered into a joint venture agreement for the construction of an oil-refining company in China, to the value of up to $4 billion, with an annual capacity of 10 million tonnes.
Currently, CNPC and China Petroleum and Chemical Corporation are trying to strengthen some of their perceived weaknesses. CNPC is working on strengthening its refining operations and Sinopec is trying to expand its upstream oil exploration capability.
