(Bloomberg) — China\u2019s fear of dependence on foreign suppliers means its biggest oil company plans to be the world\u2019s top-spending driller this year, even as it says the nation\u2019s demand for crude is plateauing.<\/p>\n
PetroChina Co. plans 239 billion yuan ($37 billion) in annual capital expenditure, the company said Thursday in its annual results. That\u2019s more than global majors including Saudi Arabian Oil Co., Exxon Mobil Corp. and Royal Dutch Shell Plc, who\u2019re trimming spending as they handle the fallout of the coronavirus pandemic on oil prices and fuel demand.<\/p>\n
China\u2019s quick recovery from Covid-19 means that its demand for oil and gas has fully recovered from the pandemic-induced swoon of early 2020, and President Xi Jinping continues to make energy security a top priority. The government earlier this month called for increased domestic production of coal, oil and gas over the next five years, an effort that\u2019s ostensibly at odds with Xi\u2019s long-term plan to decarbonize the economy.<\/p>\n
The nation\u2019s demand for crude oil has already reached a plateau, and refined product consumption will peak and begin to decline in the next decade, Duan Liangwei, PetroChina\u2019s outgoing president, said on a conference call Thursday.<\/p>\n
Demand for natural gas, one of the cleaner fossil fuels, is still expected to grow, and PetroChina is focusing its upstream operations there.<\/p>\n
nooc Ltd., the country\u2019s biggest offshore driller, is budgeting 90 billion to 100 billion yuan in spending for this year, compared with a bit less than 80 billion in 2019, although the figure could still be adjusted, Chairman Wang Dongjin said Thursday during the company\u2019s annual earnings call.<\/p>\n
Still, PetroChina\u2019s world-leading capex plan doesn\u2019t compare to pre-pandemic levels. The firm had intended to spend 295 billion yuan last year, before lockdowns beginning in January crippled the economy. It ended up shelling out about 246 billion yuan.<\/p>\n
PetroChina and Cnooc, along with China\u2019s third oil major Sinopec, were forced to cut spending as oil prices cratered on the impact of the pandemic in 2020. Crude has rebounded this year amid production cuts and optimism that vaccines will help revive demand. Sinopec reports its earnings on Sunday.<\/p>\n
Green Energy Their focus on fossil fuels aside, China\u2019s oil giants are still expected to help the country meet its ambitious goal of reaching net-zero emissions by 2060. PetroChina didn\u2019t identify spending targets on green energy on Thursday, although it did say it planned to incrementally increase such spending every year going forward.<\/p>\n
The company is looking to peak its carbon emissions by 2025, and achieve \u201cnear-zero\u201d emissions by around 2050, although it didn\u2019t specify whether that relates only to its own operations, or whether it includes the much vaster challenge of accounting for the emissions from the fuel it sells.<\/p>\n
Chairman Dai Houliang said the company plans to utilize wind, solar and geothermal resources and boost industrial use of hydrogen. For its part, Cnooc said it will increase its proportion of natural gas production to 30% by 2025, and expand its offshore wind power business in coming years.<\/p>\n","protected":false},"excerpt":{"rendered":"
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