Rosneft expects to reach total shipments to China by 2038, more than 800 million tons
Russia is undermining the position of Saudi Arabia in the market of oil supplies to China. From may 2015 the delivery of Russian oil to China, which is the world’s largest energy consumer exceeded monthly import volume of China from Saudi Arabia seven times. Experts note that today the circumstances are in favour of further expansion of supply, not only in China but also in other Asian Pacific countries. The main supplier is the company “Rosneft”, which is expected to achieve total shipments to China only by 2038, more than 800 million tons Over the past 11 years the company has supplied oil to China by nearly $89 billion.
Russia pulled into the lead among suppliers of oil to the Chinese market. According to Bloomberg, in may 2015, Russian oil supplies to China exceeded monthly import volume of China from Saudi Arabia seven times.
— Advantage Russian suppliers provides convenience logistics: sea shipments from port of Kozmino in Qingdao delivery via the pipeline system Eastern Siberia – Pacific ocean, the possibility of expanding rail shipments, — says Alexander Egorov, analyst GK TeleTrade.
According to Bloomberg, in may 2016 the volume of exports of Russian oil in this country has reached 5.25 million tons, which is by one third more than the same period last year. Three-quarters of export falls on the share of “Rosneft”, which allows the growth of supply of raw materials.
Over the last 10 years annual deliveries of oil and oil products from Russia to China increased 20-fold, to 36 million tons, with growth potential up to 50 million tons by 2020. Three quarters of this amount, or 28 million tonnes, the share of “Rosneft”. In the period from 2005 to April 2016, Rosneft supplied to China 167,1 million tons of crude oil worth more than $88,8 billion, increasing supplies from 5.1 million to 28 million tonnes, an Increase of almost 5.5 times. And by 2038, the company expects to provide the total supply of oil and oil products to China, amounting to more than 800 million tons, — said the representative of “Rosneft”. “We continue working to increase its presence in the Chinese market. The company aims to expand the pool of clients successfully carried out a test delivery by rail to customers from China, including operators of small refineries.
Today, the oil to China comes in three ways — via the pipeline system Eastern Siberia – Pacific ocean (ESPO, the branch through Skovorodino, Kozmino via), via Kazakhstan on the Atasu–Alashankou oil pipeline through Mongolia. According to the ESPO system in addition to Rosneft’s supply carry out such Russian companies as “Gazprom Neft”, “Bashneft” “Surgutneftegaz”, “LUKOIL”, and since April of this year, the beginning of export “daughter” NOVATEK company “yargeo holds the exploration”, as well as a number of small independent companies.
In “LUKOIL”, “Izvestia” said that in 2015 export shipments of oil to the East amounted to 1.5 million tons In January-July 2016, according to preliminary data, was 0.7 million tonnes. the company has not allocated deliveries to China. In other vertically integrated oil companies (VINK) today the operational review volumes and plans for oil exports to China are not provided.
It is worth Recalling that in 2015 the volume of oil production in China amounted to 215 million tons, an increase of 1.9% compared to the previous year. This was reported in the spring of this year, the Ministry of land and resources of China. The consumption was 543 million tonnes and is predicted to grow. In recent years the average growth was about 5%. Oil production in Russia and Saudi Arabia the average is at the same level — about 10 million barrels a day.
Alexander Egorov, analyst GK TeleTrade reminds that competition for energy markets has been particularly acute in the last few years.
— Chinese market is the key for all vendors, and recently, major vendors are trying to sign contracts with small independent refineries. Given the fact that Russia has huge resources especially geological reserves of raw materials, amid warming political relations with China, increase of payments and investments in national currencies, the potential for expansion of economic cooperation. All circumstances are in favor of further increase of supply, including in other countries of the Asia — Pacific region, he said.
The experts do not hasten to say that Saudi Arabia could lose its position in the Asia Pacific region. According to Dmitry Lukashova, analyst of IFC Markets, Saudi Arabia should not fear any significant displacement from the Asian markets, despite the fact that Russian oil has two important advantages: it is easier to transport and it is better suited as for small Chinese refineries located in the border areas.
— OPEC exports fairly well diversified. China’s share is about 25%, and another quarter falls on Japan and South Korea. The proportion of the supply of OPEC oil in the US is 20% and EU 15%. The rest of the volume to diverge from other regions. I believe that discounts offered by Saudi Arabia, rather, are intended to increase competition with another member of OPEC — Iran, and not Russia, — concluded the source.
