Oil and gas experts

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Oil and Gas Experts
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• 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.

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• 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.

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• Rani Jarkas claims that such a large market with
  an unquenchable thirst for oil is an oil gas
  investors 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 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.

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• 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.

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• 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.

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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 governments
  focus on economic development.

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• 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, Chinas 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.

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Investing in oil companies

• According to Rani Jarkas, China is in a rush to
  grab any oil they can and they arent afraid to
  splash money to get it. This is evident in their
  deal with Russia to buy natural gas from them.

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• 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
  Mexicos reform table.

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• 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.

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• 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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