The China National Petroleum Corporation (CNPC) (Chinese: 中国石油天然气集团公司; pinyin: Zhōngguó Shíyóu Tiānránqì Jítuán Gōngsī)[a] is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing.[4] CNPC was ranked fourth in 2022 Fortune Global 500, a global ranking of the largest corporations by revenue.[5]
CNPC is the government-owned parent company of publicly listed PetroChina, which was created on November 5, 1999, as part of the restructuring of CNPC. In the restructuring, CNPC injected into PetroChina most of the assets and liabilities of CNPC relating to its hydrocarbon exploration and production, refining and marketing, chemicals and natural gas businesses. CNPC and PetroChina develop overseas assets through a joint venture, the CNPC Exploration & Development Company (CNODC), which is 50% owned by PetroChina.
In March 2014, CNPC Chairman Zhou Jiping announced that CNPC would be opening six business units to private investors.[6]
CNPC also has a memorandum of understanding with UOP Llc, under which the two companies will collaborate on a range of biofuels technologies and projects in China.[7]
Unlike the Chinese Petroleum Corporation (CPC Corporation), which was relocated to Taiwan with the retreat of the Republic of China following the communist revolution in 1949, CNPC originated as a governmental department under the Government of the People's Republic of China. In 1949, the Chinese government formed a 'Fuel Industry Ministry' dedicated to the management of fuel. In January 1952 a division of the fuel ministry was formed to manage petroleum exploration and mining, called the 'Chief Petroleum Administration Bureau'. In July 1955 a new ministry was created to replace the Fuel Industry Ministry, called the Ministry of Petroleum. From 1955 to 1969, approximately 4 oil fields were found in 4 areas in Qinghai, Heilongjiang (Daqing oilfield), Bohai Bay and Songliao basin. CNPC was created on 17 September 1988, when the government decided to create a state-owned company to handle all Petroleum activities in China and disbanded the Ministry of Petroleum.[8][9]
CNPC's international operations began in 1993. The CNPC subsidiary SAPET signed a service contract with the government of Peru to operate Block VII in the Talara Province basin.[10] This was followed by an oil contract with the government of Sudan "In June 1997, the Greater Nile Petroleum Operating Company was established with the China National Petroleum Corporation (CNPC) taking 40 percent ownership".[11] In August 2005 it was announced that CNPC agreed to buy the Alberta-based PetroKazakhstan for US$4.18 billion, then the largest overseas acquisition by a Chinese company. The acquisition went through on 26 October 2005 after a Canadian court turned down an attempt by LUKoil to block the sale.[12] In 2006 67% of shares were sold from the parent company to PetroChina[13]In June 1997, the company bought a 60.3% stake in the Aktobe Oil Company of Kazakhstan, and in July 1997 CNPC won an oil contract for the Intercampo oilfield and East Caracoles oilfield in Venezuela.[citation needed]
In July 1998, the government restructured the company in accordance with the upstream and downstream principle of the oil industry.[14] and CNPC spun off most of its domestic assets into a separate company, PetroChina. On 5 November 2007, HK listed PetroChina was listed as an A-share in the Shanghai Stock Exchange.[15]
Driven by China's increasing energy needs and supported by the government's Go Out policy, CNPC was among the state-owned enterprises which expanded internationally.[16]: 77 Because the more accessible oil resources had already been claimed, CNPC and other enterprises entered less politically stable countries with greater political and security risks.[16]: 77
In 2012, a CNPC subsidiary, the Bank of Kunlun, was sanctioned by the United States because of its financial relationship with the Islamic Revolutionary Guard Corps and the Quds Force.[17]
In July 2013, CNPC and Eni signed a $4.2 billion deal to acquire a 20% stake in a Mozambique offshore natural gas block.[18]
In June 2014, the "head of a key China National Petroleum subsidiary was recalled to Beijing" and fell "from public view".[19] Replacement of China National Petroleum's top representative in Canada was announced in July.[19]
In February 2022, CNPC and Russia’s Gazprom signed a supply contract for 10 bcm per year through the Far Eastern route.[20]
Following the 2022 Russian invasion of Ukraine the company continued doing business in Russia and was listed on Ukraine's International Sponsors of War along with Sinopec for continuing to pay Russian taxes.[21]
CNPC holds proven reserves of 3.7 billion barrels (590,000,000 m3) of oil equivalent. In 2007, CNPC produced 54 billion cubic metres of natural gas.[22] CNPC has 30 international exploration and production projects with operations in Azerbaijan, Canada, Iran, Indonesia, Myanmar, Oman, Peru, Sudan, Niger, Thailand, Turkmenistan, and Venezuela. Many of the company's exploration projects are carried out by the Great Wall Drilling Company (GWDC), a wholly owned drilling services company.[23]
In 2018 the company announced it is building natural gas storage facilities with a total capacity of 55.6 billion cu m in the northern Henan province, to ease supply bottlenecks in the peak winter season. China has accelerated the construction of underground gas storage facilities due to the challenges faced in transporting gas last winter when logistical issues forced buyers to truck LNG thousands of kilometers from import terminals to consumption areas. The country has started an ambitious program to convert large numbers of coal-fired boilers to cleaner natural gas, to curb smog and pollution.[citation needed]
CNPC was the first Chinese enterprise to invest in Africa.[24]: 165 In 1996, it began developing oil fields previously discovered by Chevron in Sudan, but which Chevron had abandoned due to civil conflict in Sudan.[24]: 165
The Great Wall Drilling Company, a subsidiary of the China National Petroleum Company, invested $700 million in drilling 57 wells in Sudan over a 3-year period starting in 1997.[25] In 2010, the company was awarded a contract by the Sudanese Petroleum Ministry to build 5 oil rigs for $75.5 million.[26]
After South Sudan's independence in 2011, South Sudan's territory included many of the Sudanese oil fields where CNPC (as well as Sinopec) have significant interests.[24]: 165 CNPC is a major investor in South Sudan's oil sector. The company is major stockholder in Petrodar consortiums.[27]
The December 2013 beginning of the South Sudanese Civil War prompted Chinese policymakers to consider whether to relinquish oil fields and other investments or to continue to maintain them during the conflict.[16]: 130 Ultimately, a minimum team of Chinese nationals working for CNPC remained to continue oil production.[16]: 130 This decision allowed South Sudan's oil sector to continue to operate although CNPC suffered huge losses given high transportation costs and low international oil prices.[16]: 130–131 Continuing oil production helped China to earn trust from the South Sudanese government and support from the international community for its contribution in stabilizing South Sudan's economy.[16]: 130–131
As of 2023, CNPC operates oil fields in Chad with a Swiss company.[24]: 165
In Mozambique, CNPC owns 20% of two natural gas projects as of 2023.[24]: 165
As of 2023, CNPC in a joint project with Niger's central government runs a refinery.[24]: 165 CNPC also runs the country's only operational oil field.[24]: 165
In December 2011, Afghanistan signed a deal with CNPC for the development of oil blocks in the Amu Darya basin, a project expected to earn billions of dollars over two decades; the deal covers drilling and a refinery in the northern provinces of Sar-e Pol and Faryab and is the first international oil production agreement entered into by the Afghan government for several decades.[28] All CNPC operations were shut down in Afghanistan due to the Taliban takeover.
CNPC is one of the most active Chinese companies in the petroleum sector in Kazakhstan.[29] It is heavily involved in the development of Kazakh oil after the acquisition of Alberta-based PetroKazakhstan, a company with all operations in Kazakhstan. The company was purchased for $4.18 billion. Political resistance in Kazakhstan to the deal was placated by the sale of a minority stake in PetroKazakhstan by CNPC to KazMunaiGaz, the Kazakh state-owned oil company.
In June 2023, CNPC received full support from Samruk-Kazyna for investments in the expansion of Kazakhstan's gas and oil pipeline capacities, as well as the construction of a sour gas processing plant to be located at the Kashagan offshore development site. In addition, CNPC was involved in the upgrade projects at the Shymkent oil refinery. Through the implementation of these projects, China will be able to receive oil produced and then diverted from Kazakhstan.[30] The modernisation of the oil refinery in Shymkent was completed in August 2023.[31]
Pakistan
Great Wall Drilling Corporations (GWDC) was operating in Pakistan until 2008. In 2008, all of GWDC operations and assets in Pakistan were acquired by Chuanqing Drilling Engineering Company Limited (CCDC) another subsidiary of CNPC.
In 2006, CNPC formed an international consortium with state-run Uzbekneftegaz, LUKoil Overseas, Petronas, and Korea National Oil Corporation to explore and develop oil and gas fields in the Aral Sea.[32]
In October 2004, CNPC began construction of a pipeline from the Middle East to Xinjiang province.[citation needed]
In June 2023, QatarEnergy signed a 27- year deal with CNPC for 4 million metric tons of LNG to be delivered yearly. This is the second agreement that Qatar has made with a Chinese company in less than a year. In November 2022, Sinopec and QatarEnergy made a similar deal.[33] Both CNPC and Sinopec also have an equity stake in the Qatar North Field eastern expansion which amounts to about 5% of an LNG train of 8 million metric tons of year.[34]
CNPC announced that it would begin a 457-day drilling project in the Taklimakan Desert in June 2023 to drill down to the Earth's core, 10,000 metres deep, for scientific purposes and to search for oil and gas.[35][36] In August 2023, CNPC also began ultra-deepwater exploration drilling in search for oil and gas to slowly enable China to rely less on foreign oil.[37]
In May 2014, A 30-year deal between Russia's Gazprom and China National Petroleum Corporation (CNPC) which was 10 years in the making was estimated worth $400 billion. The agreement was signed at a summit in Shanghai and is expected to deliver some 38 billion cubic meters of natural gas a year, starting around 2018, to China's burgeoning economy.[38]
CNPC operated in New Zealand as CCDC (NZ) Drilling and had one drilling rig, a triple stand DC rig named Rig 43. CCDC NZ started workover/drilling operations in the Kapuni gas fields of South Taranaki New Zealand in late 2012 for "tight gas". The rig completed the Kapuni drilling campaign of 4 wells for STOS (Shell Todd Oil Services) in August 2013. Its next drilling project commenced August 2013 for Tag Oil with one well successfully drilled at Cheal C of a depth of just un