China, one of the largest consumers of oil in the world, has become more and more dependent on mass imports over recent years. But as oil prices rose several years ago and demand continued to grow, under the support of a government strategy to ensure energy security, Chinese companies have been focusing on deep-sea energy explorations. They have also made milestone technological breakthroughs and have expanded across the world.
Ten years ago, China was lagging behind other countries in terms of developing technologies and equipment for the purposes of exploring and extracting oil in the deep ocean, but now, it is a leader in the field.
In 2016, China launched its first major deep-sea oil exploration project, and currently, it is taking on many projects both at home and abroad.
Prompted by rising oil prices and a national drive to ensure energy security in the long run, China has embarked on an incredible journey over the past 10 years to feed its big appetite for deep-sea oil - one that has seen major technological breakthroughs and vast geographic expansion.
"It has truly become a remarkable decade for China's ability to explore and extract deep-sea oil. We started from zero, but now we are at the top," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Tuesday.
Lin pointed out that within just a decade or so, China has been able to develop some of the world's most advanced technologies and equipment for deep-sea oil exploration, with Chinese companies leaving their footprints in many oil-rich deep seas around the world.
Technological breakthroughs
On February 13, Yantai CIMC Raffle Offshore Ltd (CIMC Raffles) unveiled a semi-submersible drilling platform named the "Blue Whale One," CIMC Raffles' parent company China International Marine Containers Group (CIMC) announced in a statement on its website.
The statement said the Blue Whale One was the most advanced semi-submersible drilling platform in the world, breaking records with its operating depth and drilling depth capabilities.
With a length of 117 meters, a width of 92.7 meters and a height of 118 meters, the platform has a maximum drilling depth capability of 15, 240 meters, according to CIMC. It has also improved efficiency by 30 percent and saved fuel consumption by 10 percent compared with some of the other platforms currently being used across the world, the company noted.
The Blue Whale One made its debut on May 18 and successfully extracted natural gas hydrate, also known as combustible ice, in the South China Sea, according to a separate statement from CMIC.
"China has successfully extracted natural gas hydrate at sea for the first time," Jiang Daming, Minister of Land and Resources, was quoted as saying in the statement.
The platform will be operated by Tianjin TEDA Bluewhale Offshore Engineering Technology Co and China National Petroleum Offshore Engineering Co, the statement noted.
But China's technological advances did not stop there. Right after the Blue Whale One went into operation, CIMC Raffles completed sea trials for a new-generation ultra-deep-water semi-submersible drilling platform, aptly dubbed the "Blue Whale Two," CMIC announced in August.
"Equipped with highly efficient dual-derrick rigs, the platform boasts the greatest operating depth and drilling depth capabilities in the world and is therefore suitable for 95 percent of global deep-sea operations," CMIC said in a statement.
Han Xiaoping, chief analyst at energy industry website china5e.com, said that exploring and drilling in such deep-water areas are very challenging and require very advanced technological capabilities and expertise.
"Not only do you need to put a lot of investment [into the project], but you also need to have advanced engineering and manufacturing capabilities," Han told the Global Times on Tuesday, adding that China's fast progress in these areas "could be unprecedented."
While driving such major breakthroughs in technology and engineering, the country began to witness an increase in orders for China-made deep-sea oil drilling equipment, from both domestic and foreign companies, according to a report published on news website jiemian.com on Wednesday.
After starting from scratch, orders for Chinese deep-sea drilling equipment now account for 25 percent of total global orders, the report said, adding that, before 2006, China had no self-developed deep-sea drilling platform that could be used for 300-meter-deep waters in the South China Sea.
China's first self-developed deep-sea oil drilling platform was the "Haiyang Shiyou 981," which was completed in 2010 and went into operation in 2012, according to the report on jiemian.com.
Expansion ventures
Apart from technological advances, Chinese companies have also been extensively expanding their deep-sea oil drilling operations both in Chinese waters and abroad.
In 2016, China discovered its first major deep-sea natural gas reservoir in the east of the South China Sea, according to the report on jiemian.com.
As of Wednesday, China had so far discovered more than 13 major natural gas and oil reservoirs in the deep-water areas of the South China Sea, with a total estimated reserve of 300 billion cubic meters of natural gas and 68.29 million cubic meters of oil that together are worth more than 404.7 billion yuan ($61.13 billion), data from the report showed.
Chinese companies such as State-owned energy giant China National Offshore Oil Corp (CNOOC) have also been involved in more and more overseas deep-sea natural gas and oil exploration projects, media reports said.
"We have expanded our deep-water exploration operations to Mexico, Brazil, western Africa and Ireland," Xu Keqiang, a deputy general-manager at CNOOC, said during a forum on deep-sea energy in November.
CNOOC's overseas moves have included an acquisition of stakes in a Nigerian deep-sea oil project in 2006, a takeover of Canadian oil and gas company Nexen Inc in 2013 and a purchase of offshore oil projects in Brazil in November this year, according to media reports.
Xu said at the November forum that CNOOC is planning to reach a collective annual output of 10 million tons of oil and natural gas from overseas deep-sea projects.
Lin, the expert at Xiamen University, said "basically, Chinese companies are deeply involved in all the major regions for deep-sea oil drilling and exploration."
He noted that apart from CNOOC, other State-owned companies such as China Petroleum and Chemical Corp (Sinopec) as well as China National Oil and Gas Exploration and Development Corp are also expanding their deep-sea oil drilling operations abroad.
Energy security
Experts said that China's quest for deep-sea energy started a few years ago when oil prices were very high and that China's demand for oil has continued to rise.
"China made deep-sea energy exploration a national strategic sector of development to basically ensure long-term energy security for the country," said Han of china5e.com.
Lin also opined that due to the heavy investment and technicalities required by deep-sea drilling and exploration, the fast rise in China's technological ability and operation expansion was largely fueled by hefty government funding for research and development efforts.
"A group of companies or even a single company cannot achieve such successes alone within such a short time frame - even if they tried - without government support," Lin said, noting "the cost is just too high and it doesn't make sense in terms of probability for companies to pursue [these ventures singlehandedly]."
Both those experts pointed out that even with all the technological advances today, companies would still be reluctant to put so much focus on deep-sea oil exploration with oil prices being relatively low at the moment and if it were not for the country's long-term energy security goals.
"It's definably an investment for the future, not a market business for the present, [especially] when oil prices are so low," Lin said.
