World non-renewable energy discussion

now with so much additional refinery capacity coming online, Zhejiang petrochemical (an arm of Rongsheng) has reached agreement with Sinopec to have Sinopec market 60% of its refined product sales. That means a lot of diesel & petrochemical. Sinopec is the dominant player in the China market. Both also have strong relationship with Saudis.

ZPC is eager to export, that's about 1million bpd of gasoline for April.

someone complaining about all the refineries close in America and Europe. But the reality is that with so many Asian refineries (especially new mega refineries in China), the Western ones are just not going to be competitive. So the old ones in the West will get outcompeted and close and Western demand for Crude will continue to drop. China's gasoline demand will continue to drop with the move to EVs, so most of the crude demand is going into petrochemicals and diesel/gasoline exports.

Another interesting fact is that more heavy oil capable refineries are coming online which allow they to refine harder to refine oils from Canada, Colombia, Venezuela and Ecuador.

more details on the Rongsheng/ZPC/Aramco deal. Huge numbers all the way around by Saudis to secure such a large long term contract.

optically, China is basically getting Saudis on their side because it is going to continue to be their major energy purchaser while Europeans work toward 0-carbon goals. I think China has quite a lot of leverage here as Saudis look toward a 2050 deadline where it can no longer sell oil to Europe. It needs to use that to press for Petroyuan when possible.

despite what the Europeans say, they need Russian natural gas, even if it ends up being the more expensive LNG variety

Saudis are definitely doubling down with China
They are cutting production in defiance of Biden administration because they identified China as their new backer. Big deal.
If those 690k bpd are priced in RMB and paid through CIPS, big deal.

Again, Indians are curbing their diesel and gasoline export to protect domestic economy

Com'on, time for China to maintain their energy cost advantage vs Europe

this cracks me up. America has its own oil production and so does Canada. Europe is the only sucker

Question: with such a large landmass, it's weird that China is lacking in oil/natural gas resources compared to countries of similar size. Most of the larger countries, Russia, Canada, America have large reserves just by virtue of their size. New oil reserves are being discovered all the time, and China was quite poor, large parts of the country are remote mountainous terrain or deserts and lacking in education until 20 years ago.

Is it possible that there's some mega-large easily accessible oil/natural gas reserve in some remote area of the country that simply hasn't been discovered yet? I don't know just how much of China has been extensively surveyed. I know that America has been extensively surveyed by some of the best equipment and geologists on earth multiple times over a century, both for easily accessible oil and also for shale and even then they're still finding new deposits occasionally, granted they are always smaller and harder to access than the large near surface deposits found in the early century.

Is it possible that a venezuela tier deposit has been hiding under the gobi desert all these years and geologists didn't have the time and funds to find it yet?

tacoburger said:

Question: with such a large landmass, it's weird that China is lacking in oil/natural gas resources compared to countries of similar size. Most of the larger countries, Russia, Canada, America have large reserves just by virtue of their size. New oil reserves are being discovered all the time, and China was quite poor, large parts of the country are remote mountainous terrain or deserts and lacking in education until 20 years ago.

Is it possible that there's some mega-large easily accessible oil/natural gas reserve in some remote area of the country that simply hasn't been discovered yet? I don't know just how much of China has been extensively surveyed. I know that America has been extensively surveyed by some of the best equipment and geologists on earth multiple times over a century, both for easily accessible oil and also for shale and even then they're still finding new deposits occasionally, granted they are always smaller and harder to access than the large near surface deposits found in the early century.

Is it possible that a venezuela tier deposit has been hiding under the gobi desert all these years and geologists didn't have the time and funds to find it yet?

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They have a lot of shale gas/oil resources buried deeper in there. There are the offshore oil in SCS. But if you look at where they are going with renewables, oil & gas just aren't as important as they were 10 years ago for China.

Their new crude demand is pretty much just to support the domestic petrochemical industry expansion that is a nice to have but not a necessity if you get into a conflict.

tphuang said:

They have a lot of shale gas/oil resources buried deeper in there.

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Yeah but that's shale, I'm talking about easily accessible deposits that aren't going to have all the issues that shale has. I know that China has the largest shale deposits in the world, but it's not like China isn't having water shortages right now. Not to mention the price, money and manpower needed to fully develop shale, it took decades for American shale to become the powerhouse that it is today.

tphuang said:

But if you look at where they are going with renewables, oil & gas just aren't as important as they were 10 years ago for China.

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It's still gonna take a while before they can wean themselves off of fossil fuels. Probably another decade. If not, they wouldn't still be buying LNG from America.

tphuang said:

Their new crude demand is pretty much just to support the domestic petrochemical industry expansion that is a nice to have but not a necessity if you get into a conflict.

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A conflict throws so many things into question that domestic supply is still the most important factor. Your population might tolerate war, but will they tolerate their fuel prices going up 10x at the same time? Russian pipelines may suffer "accidents", UAE and the middle east is always a hotspot that might flare up at any time, let alone what could lead up to WWIII. Potential blockades/sanctions...

tacoburger said:

Yeah but that's shale, I'm talking about easily accessible reverses that aren't going to have all the issues that deposits has. I know that China has the largest shale deposits in the world, but it's not like China isn't having water shortages right now. Not to mention the price, money and manpower needed to fully develop shale, it took decades for American shale to become the powerhouse that it is today.

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Isn't China currently right now producing like ~5 million barrels a day, that's already about ~1/3 of what it consumes, and actually places it in like top 10 in the world when it comes to oil production (actually more around the top 5)

Actually a quick search:
So top 4 at ~4.9 m barrels a day (Russia 3rd at 11m, Saudi at 2nd with 12m and US at 15 million barrels a day).

tacoburger said:

It's still gonna take a while before they can wean themselves off of fossil fuels. Probably another decade. If not, they wouldn't still be buying LNG from America.

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That's really not all that long though, and with more public transport going electric, even if all oil from the outside world was cutoff, life can still very much go in China (electric bikes, public transport, electric cars etc.).

tacoburger said:

A conflict throws so many things into question that domestic supply is still the most important factor. Your population might tolerate war, but will they tolerate their fuel prices going up 10x at the same time? Russian pipelines may suffer "accidents", UAE and the middle east is always a hotspot that might flare up at any time, let alone what could lead up to WWIII. Potential blockades/sanctions...

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I think it's likely that the Chinese population will tolerate the war even if fuel gets expensive/rationed/diesel vehicles get banned.

Look the questions and answers about if China needs access to more or less oil or how it will function during a oil shortage or how much oil it currently produces is irrelevant.

All I'm asking is, how extensively geological surveyed is China? Have they gone through every square meter of the country with a fine toothed comb like America has, or is there still huge parts of the country still unexplored where large amounts of oil/gas may still be lurking? If it's the latter, than it's basically guaranteed that they will still find large easily accessible deposits due to the sheer size of the country. America still finds some medium sized deposits here and there and that's after they have spent nearly a century trying to find any oil/gas that they can. Just look at the frenzy during the oil crisis and shale boom.

tacoburger said:

Look the questions and answers about if China needs access to more or less oil or how it will function during a oil shortage or how much oil it currently produces is irrelevant.

All I'm asking is, how extensively geological surveyed is China? Have they gone through every square meter of the country with a fine toothed comb like America has, or is there still huge parts of the country still unexplored where large amounts of oil/gas may still be lurking? If it's the latter, than it's basically guaranteed that they will still find large easily accessible deposits due to the sheer size of the country. America still finds some medium sized deposits here and there and that's after they have spent nearly a century trying to find any oil/gas that they can. Just look at the frenzy during the oil crisis and shale boom.

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I don't know if we have good public knowledge about that.

I do remember still reading about various geological discoveries, including that of oil/shale/gas in recent years, so it must mean that geological surveys are still happening and that not every square meter of the country has been surveyed.

If I had to make a guess, I don't think we're gonna see incredibly large oil or even shale discoveries, but there's likely to be more discoveries of oil and shale though.

tacoburger said:

Look the questions and answers about if China needs access to more or less oil or how it will function during a oil shortage or how much oil it currently produces is irrelevant.

All I'm asking is, how extensively geological surveyed is China? Have they gone through every square meter of the country with a fine toothed comb like America has, or is there still huge parts of the country still unexplored where large amounts of oil/gas may still be lurking? If it's the latter, than it's basically guaranteed that they will still find large easily accessible deposits due to the sheer size of the country. America still finds some medium sized deposits here and there and that's after they have spent nearly a century trying to find any oil/gas that they can. Just look at the frenzy during the oil crisis and shale boom.

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I’m not sure but China is regularly finding small deposits in her territory and I heard they are able to be self sufficient for a decade if they had to be.

These small onshore deposits are actually fantastic, because once they are quickly used up they can then be used for storage of energy or CO2, for which they will earn handsomely.

With the latest breakthrough, it is expected that a second shale gas field of "trillion-cubic-meter reserves and 10-billion-cubic meter production" could be built in China, providing high-quality clean energy supply to promote Chinese modernization, said He Xiao, general manager of PetroChina Southwest Oil & Gasfield Company.

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Under current technological conditions, China's shale gas production is expected to reach 30 billion cubic meters in 2025 and 35 to 40 billion cubic meters in 2030, CCTV reported.

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