Natural gas consumption to increase

China Daily, January 21, 2011

China aims to cut its carbon dioxide emissions per unit of GPD by 40 to 45 percent in 2020 from 2005's level. As such, the country has stepped up efforts to explore and produce unconventional natural gas, such as shale gas, as it strives for cleaner energy sources.

In addition, CNPC's report also projected that China's apparent oil demand may rise 18.7 percent from 2010 to 540 million tons in 2015 on the back of the country's rapid economic expansion. Apparent demand takes into account domestic output and net imports, but excludes stockpiles

Amid the consumption increase, the nation's overseas oil dependence ratio may climb to 60 percent from 55 percent in 2010.

China also accelerated the pace of cross-border cooperation in its "going abroad" policy last year, to tap into more natural resources through the merger and acquisitions (M&A) activities of its big oil and gas producers.

The amount of overseas M&A by Chinese firms in the oil and gas industry reached a new high of $30 billion in 2010, accounting for 20 percent of the global total, CNPC said.

Among the deals, 80 percent took place in Canada and South America and unconventional sources, including deepwater drilling and oil sands assets, accounted for more than 80 percent of the total cross-border transactions in terms of capital.

"Going forward, we expect that international cooperation will take place in Africa, South America, and Canada, given the ample reserves of oil and gas in those regions, " said Wu Mouyuan, engineer of Overseas Investment Environment Research Department under the CNPC's research institute.