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Oil and gas experts

Rani Jarkas claims that such a large market with an unquenchable thirst for oil is an oil & gas investor’s dream. However, investing in oil and gas in China is an intricate process that is run by government owned conglomerates.

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Oil and gas experts

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  1. Oil and Gas Experts

  2. Fossil fuels are vital to every economy since they are the power which drives business, industry and trade. China, according to oil and gas experts, ranks in sixth position for oil production in the world and produced 3.827 million barrels per day in July 2017.

  3. The demand for oil is large because of the manufacturing industries which are the backbone of the Chinese economy. China is also the second biggest importer and consumer of oil products trailing the United States in both categories.

  4. Rani Jarkasclaims that such a large market with an unquenchable thirst for oil is an oil & gas investor’s dream. However, investing in oil and gas in China is an intricate process that is run by government owned conglomerates.

  5. Oil conglomerates in China These conglomerates carry out various activities in the oil supply chain including exploration, mining, refining, petroleum and chemical manufacturing, storage and transportation of oil in its many forms. The China Petroleum and Chemical Corporation (Sinopec) is the largest of these conglomerates in terms of revenue with approximately $440 billion.

  6. It actively trades on the New York Stock Exchange (SNP), Hong Kong Stock Exchange and the Shanghai Stock Exchange. Sinopec is however the second largest crude oil importer in volume. Hot on their heels are the China National Petroleum Corporation CNPC, the second largest oil producer by revenue.

  7. CNPC has an estimated $425 billion in revenue and are the biggest producer by volume. In 2014, CNPC produced 1.2 billion barrels of oil far outdoing the 361 million barrels by Sinopec.

  8. Oil consumption and demand The two conglomerates are the biggest but others exist such as China National Offshore Oil Corporation CNOOC, Yanchang Petroleum and PetroChina. What is common with these companies is that they all source for oil from foreign nations. Rani Jarkas notes that the high demand for oil in China is spurred by the government’s focus on economic development.

  9. Oil and gas experts explain that unlike other countries trying to lower energy consumption, China is looking to increase it. The US EIA projected that by 2040, China’s consumption of oil will dwarf the U.S level. Industrializing China is still expected to increase the demand which the Chinese conglomerates are racing to satisfy.

  10. Investing in oil companies According to Rani Jarkas, China is in a rush to grab any oil they can and they aren’t afraid to splash money to get it. This is evident in their deal with Russia to buy natural gas from them.

  11. Chinese conglomerates have been busy securing natural gas and oil reserves in Canada and lately Mexico through partnerships and acquisitions. China Development Bank for instance loaned Pemex $1 billion in 2013 guaranteeing a seat at Mexico’s reform table.

  12. CNOOC (NYSE: CEO) benefitted from the deal with exploration and production rights. With Mexico ready to open up their oil market to foreigners to increase capacity and fulfill supply.

  13. Chinese conglomerates will have a foot in the door because of the generosity shown in the past and the relatively low price of oil in Mexico. CNOOC stocks may rise and surpass the levels registered before global oil prices fell.

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