“One Belt and One Road” Explores a Mutual-beneficial and Win-Win Path for the Oil Trade Sector 

- The 4th China International Oil and Gas Trade Congress Successfully Curtains up in Shanghai

November 19, Report from Shanghai:

The 4th China International Oil and Gas Trade Congress, supported by Ministry of Commerce of People’s Republic of China and Shanghai Municipal Government, and sponsored by Trade Development Bureau of Ministry of Commerce, successfully curtained up in Shanghai on November 19. Delegates from large multinational petroleum enterprises from 19 countries, national petroleum companies, information, finance, transportation, insurance enterprises related to the petroleum and natural gas trade sector, government bodies, trade associations in relevant sectors and research institutes attended the congress. The China International Oil and Gas Trade Congress of this year takes “New Vision and New Development: New Opportunities for Global Oil and Gas Trade” as the theme and discusses several topics, e.g. the current situation, opportunities and challenges for oil and gas trade in China and the world under the “One Belt and One Road” strategy and future development trend. Delegates from Ministry of Commerce of People’s Republic of China and Shanghai Municipal Government made congratulation speeches on the congress. Experts from Development Research Center of the State Council and National Development and Reform Commission made speeches on the congress.

The 4th China International Oil and Gas Trade Congress is cosponsored by China North Industries Group Corporation, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec Group), China National Offshore Oil Corporation (CNOOC), Sinochem Group, Zhuhai Zhen Rong Company, China Aviation Oil Supply Corporation (CNAF), Shanghai International Energy Exchange, CEFC China Energy Company Limited (CEFC China), Heilongjiang United Oil & Chemicals Co., Ltd., S&P Global Platts and Argus Co., Ltd, UK. 

Officials from Ministry of Commerce said that currently, the fundamentals of global oil and gas supply and demand is ample, the oil price continues to decrease, and a new energy pattern is gradually coming into shape. Meanwhile, the continuous economic growth in China promotes the stable growth of oil and gas import demands. China continues to promote reform of petroleum mechanism, and this reform will further stably expand the scale of petroleum trade. How to explore a mutual-beneficial and win-win path for the oil trade sector under the “One Belt and One Road” strategy? This is a key issue for discussion on the congress of this year, and has achieved satisfied results on the discussion.

Experts said that the “One Belt and One Road” strategy would promote energy cooperation between China and countries along the road, provide safe and reliable source of imported oil and gas to China, and thus by taking this opportunity, promote the development of relevant sectors along the “One Belt and One Road”, and open a new window of opportunity for countries along the “One Belt and One Road” to supplement with each other’s advantages and achieve further opening up and development. Since this year, government bodies of China, e.g. Ministry of Commerce of People’s Republic of China and National Development and Reform Commission, actively promoted reform of petrochemical industry and trade framework, and encouraged crude oil processing enterprises conforming to conditions to import and process crude oil, actively participate in market competition and bring about new changes to the circulation domain. So far, 7 crude oil processing enterprises have obtained the right to use of imported crude oil, and 6 enterprises have obtained the qualification of non-state owned trade and import. 

Delegates from small and medium-sized petroleum enterprises said that the opening of market access explores new pattern for orderly competition and brings new opportunities of development for small and medium-sized petroleum enterprises in several sectors, e.g. trade, finance, warehousing and logistics. 

While creating opportunities, the change of global supply and demand pattern would probably bring new challenges. Delegates from enterprises considered that first, the shock of low oil price would result in great shrinking of profits of global and domestic oil companies, and force these companies to cut down investment and costs and enhance efficiency. Second, the turbulent political scene in some countries along the “One Belt and One Road” brings huge challenges to the safety of oil and gas cooperation and adds risks to geopolitics. Third, limiting factors still existed in some countries along the “One Belt and One Road” in terms of promoting investment and trade facilitation and eliminating investment and trade barrier, and these factors seriously damaged the interests of energy trade enterprises of China. Finally, to some countries along the “One Belt and One Road”, it is difficult for them to eliminate problems existed in infrastructure, business and trade service and government governance. The influence of these problems on oil and gas transmission, financing and insurance, human resources and supplies purchasing would exist for a long time. 

As for the challenges that global oil and gas trade faces, experts and delegates from enterprises gave several suggestions: Make more researches on oil and gas cooperation strategies on the “One Belt and One Road” from the state level. Advocate the coexistence of “energy input” and “energy output”. Encourage domestic enterprises to increase investment and M&A on oil and gas resources in the radiating areas of the “One Belt and One Road” strategy. Construct regional trade networks and trade centers, and finally, establish a pricing center in China for the oil and gas market in Asia-Pacific region, so as to create better market environment for the socioeconomic development in the entire Asia-Pacific region, give full play to and strengthen the important role of China in regional and global governance and show the image that a responsible great country should have. 

Leaders from the most representative and authoritative global petroleum companies and trade companies, shipping enterprises, financial institutions, consultation agencies and academic research institutes made keynote speeches and discussed several hot topics on the congress, e.g. market demand and pricing mechanism and industrial chain of oil and gas trade. 

Ministry of Commerce of People’s Republic of China has sponsored three China International Oil and Gas Trade Congresses in Shanghai since 2012. This congress creates an efficient business platform for petroleum enterprises, achieved satisfied results and is well acknowledged by the oil trade sector of China.