China Inc Joins the Big League in Oil and Gas Services
April 15 (Reuters) - Global oil companies are increasingly turning to China for services and equipment, attracted by lower costs and a newly acquired expertise that is challenging more established rivals.
State-run and privately controlled Chinese rig makers, oil and gas services and engineering firms are showing up in the supply chain everywhere from the Middle East, the North Sea and North America to frontier areas like Mozambique.
Chinese yards, having come from nowhere in less than a decade, are building more jack-up rigs - the most common offshore rig used for shallow water drilling - than all the other yards in the world put together, data from industry consultants IHS Petrodata shows.
Helped by strong government support, plentiful labour and an abundant supply of raw materials like steel, China could become a major offshore oil equipment manufacturing hub in less than 10 years, industry executives say, just like Singapore and South Korea overtook the United States and Europe in the 1990s.
"The Chinese provide products with better value," said Scott Darling, Hong-Kong based head of Asia oil and gas research at JPMorgan, which hosted an investor tour of the Middle East last month to study the competitiveness of Chinese energy equipment and services suppliers. "And they are experts in managing supply chains, thanks to their domestic experiences."
The rise of Chinese energy equipment manufacturers and services firms overseas, partly fuelled by the rapid expansion of state energy giants, is putting pressure on established companies including Singapore oil rig makers Keppel Corp and Sembcorp Marine, and land drilling giant National-Oilwell Varco Inc (NOV).
To stay ahead, both Keppel and Sembcorp are increasingly building more sophisticated equipment, an area where Chinese firms still lack expertise.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Report: Quarter Of Oil Refineries Risk Closure Under Climate Goals (Nov 02)
- Sources: China's Sinopec Mulls US Oil Projects Ahead Of Trump's Visit (Oct 31)
- Sinopec's Oil Refining Overcomes Continued Upstream Losses (Oct 30)
Company: CNOOC more info
- CNOOC 3Q Revenue Rises; Only Halfway To 2017 Spending Goal (Oct 25)
- CNOOC Completes Test Runs at Huizhou Refinery in Guangdong - Report (Oct 09)
- Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
Company: CNPC more info
- Petrobras CEO Says To Discuss Refining Partnership With CNPC CEO (Nov 15)
- CNPC Plans to Cut Gas Supplies to Industrial Users-State Media (Nov 06)
- China's CNPC Starts Third Natural Gas Pipeline To Shanghai (Oct 13)