China's largest oil rig in the South China Sea. The country will invest up to 300 billion yuan ($47 billion) in domestic marine oil and natural gas construction projects within five years. [China Daily]
A 10-year plan to develop the country's offshore engineering equipment manufacturing industry is expected to be released by year's end, an official from the Ministry of Industry and Information Technology (MIIT) said on Monday.
The plan would support China's ambitions to expand its largely untapped deepwater oil and natural gas exploration sectors.
Drafting of the plan, which would run through 2020, is almost complete, but State Council approval is still needed, said You Shumin, head of the shipbuilding sector of MIIT's Department of Engineering Equipment Industry Division.
The program will focus on technological breakthroughs in deepwater equipment, including the development of offshore oil and natural gas development equipment and maritime solar power equipment, You said at the China International Petroleum Technology and Offshore Engineering Conference in Beijing.
She added that the plan will also encourage cross-border cooperation between Chinese companies and their foreign counterparts to lift the industry's global competitiveness.
Following a wave of deepwater oil exploration by Western countries, China has accelerated the pace of its offshore exploration in the South China Sea. Most onshore fields in China have already been fully developed.
China National Offshore Oil Corp (CNOOC), the country's biggest offshore oil producer, said earlier that it aims to produce 50 million tons of oil equivalent from deepwater fields by the end of 2020.
CNOOC produced its first 50 million tons of oil equivalent from offshore resources in 2010. CNOOC launched its first deepwater semi-submersible drilling platform, capable of operating at depths of 3,000 meters, in May. The Shanghai-made rig, which cost CNOOC 6 billion yuan ($940 million), would mainly be used in the company's South China Sea operations.
The company plans to invest 200 billion yuan over 20 years to tap the area's oil and gas resources.
The next 10 years will be a crucial period of fast growth for deepwater oil production, both in China and around the world, and offshore engineering equipment will play a key role in the sector's development, You said.
She said that China's offshore engineering equipment manufacturing sector is valued at about 30 billion yuan, or 7 percent of the world market.
"Offshore oil and gas development has begun an upswing," said Dong Qiang, vice-president of China Shipbuilding Industry Corp.
He noted that the central government's move to designate marine engineering equipment as one of the advanced manufacturing industries set for development during the 12th Five-Year Plan (2011-2015) will propel the sector's growth.
According to Zhao Zhiming, chief adviser of the China Petroleum and Petrochemical Equipment Industry Association, the nation is expected to invest 250 billion yuan to 300 billion yuan in domestic marine oil and gas construction projects within five years.
Part of the money will go into engineering equipment, Zhao said. "We still lack cutting-edge technologies to build the most sophisticated offshore engineering equipment. More investment in research and development is crucial," Zhao said.