CHINESE OFFICIALS SAY DRILLING OUTLOOK BRIGHT
China's oil drilling industry is one of
the few bright spots in the international oilpatch with about
1,000 rigs currently working and annual increases of 80-100
expected through the end of the century, a Chinese petroleum
official said.
    "In China, production concentrates on the domestic market,
and does not depend on the international price of oil," Zhai
Guang Ming, a director of the Chinese Ministry of Petroleum,
told Reuters.
    Chinese oil sold within the nation's borders is priced at
about one-third the 18 dlr a barrel benchmark price established
by the Organization of Petroleum Exporting Countries, Zhai said
in an interview at the World Petroleum Congress.
    The optimism in China is in sharp contrast to the United
States where weak oil prices have prompted a steep fall in the
number of active rigs from a 1981 peak of 4,500 to only 765
last week according to the latest Baker Hughes Co rig count.
    At this time, China actually has more rigs in operation
than any other country in the world, said Xianglin Hou, another
member of the 20-man Chinese delegation at the Houston meeting.
    But this does not mean good news for the sagging oilfield
equipment industry in the rest of the world, said Bryan Walman,
international sales manager for Reed Tool Co in Houston.
    Walman said more than 90 pct of China's drilling activity
is on land and under the control of the Chinese government
which requires local manufacture of drilling equipment.
    But U.S. and other western nations do provide equipment for
China's fledgling offshore projects as well as participate in
the actual drilling, he said.
    Amoco Corp <AN>, for example, has reported a discovery in
1,000 feet of water in the South China Sea.
    "We're encouraged," said Alfred Munk, manager of Amoco's
foreign affairs, "but we need substantial reserves before we
can do commercial production in a remote area like that."
     Zhai estimated that current Chinese oil production of 130
mln tonnes a year should rise to total 200 mln tonnes annually
by the year 2,000.
    Chinese crude reserves total 23.6 billion barrels, with
ultimate resources estimated at 69.3 billion barrels.
 Reuter
