A subsidiary of China’s Sinopec will cover the development of four oil fields in Shandong province in East China. This is stated in the statement of the holding, reports TASS.
It is noted that these deposits are the least cost-effective among the 70 in the company’s portfolio. Due to the termination of their development, Sinopec will be able to save on operating costs is not less than 130 million yuan (20 million dollars).
Oil companies are forced to revise their investment and production plans amid oversupply on the world oil market by volume 1,5-2 million barrels per day. Ramp up in OPEC production, the slowdown of China’s economy and under the pressure of several other factors, in the last year and a half the cost of a barrel of Brent crude fell three times.
At the present time, and OPEC and Russia show record levels of oil production. Oil production in the U.S. last year declined by only 5 percent.
In mid-February of 2016 four countries — Russia, Saudi Arabia, Qatar and Venezuela — have agreed about freezing of oil production, provided that other manufacturers will join this initiative.
A new round of talks between key oil-producing countries held on 17 February in Tehran. It involved representatives of Iran and Iraq (the outcome of the negotiations is still unknown).
Sinopec is one of three oil giants in China. In 2015, the Corporation produced 296,3 million barrels of oil, nearly 5 percent less than the previous year.
