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Time
Oiling the Gears
By Deng Yaqing  ·  2019-01-31  ·   Source:

President of Chad Idriss Déby Itno (front, second right) attends the handover ceremony of the first phase of the Ronier oilfield project, developed by CNPC, on March 1, 2011 (COURTESY PHOTO)  

Deep in the interior of Central Africa lies the Republic of Chad, a country dependent on agriculture for most of its revenue. Below the surface, it has abundant reserves of petroleum, but it was not until Chinese oil and gas giant- China National Petroleum Corporation (CNPC) began production there in 2011 that the country was eventually able to fulfill domestic oil demand with its own supply.

When CNPC first set foot in Chad 15 years ago, domestic oil consumption in the country was heavily dependent on imports. In September 2007, a bilateral agreement was reached to build a joint-stock refinery plant, marking the starting point of China-Chad petroleum cooperation.

As the N'Djamena refinery plant went into production in June 2011, President Idriss Déby Itno said his country had won the victory of energy independence, which he attributed to Chad's significant partnership with China.

Solid progress

Now, the CNPC operation covers the entire petroleum industrial chain in Chad, ranging from exploration and development to pipeline transportation, refining and storage, project construction, and technology services.

However, such starting-from-scratch stories are not confined to Chad. CNPC's cooperation with Sudan began as early as 1995, and the project has now become CNPC's largest and most successful overseas venture. In Niger, a complete petroleum industrial system has taken shape through a partnership with CNPC, allowing the country to not only meet its own oil demand, but also earn foreign exchange through oil exports. Now, the petroleum industry is the backbone of the local economy. And in addition to Chad and Niger, the CNPC West Africa branch has also seen its operations spread into Algeria, Mozambique and Tunisia.

With support from the Chadian partner and its stakeholders, CNPC has developed two exploration and extraction projects, two crude oil pipeline projects and the N'Djamena refinery, which can produce gasoline, diesel, aviation fuel, fuel oil, liquefied natural gas and polypropylene.

By the end of July 2018, the company had developed six oil fields in Chad. The oil production rate has registered steady growth in recent years and is approaching 80,000 barrels of oil per day (BOPD). Company data shows that in the near future, petroleum exploration and development capacity in Chad will reach 120,000 BOPD.

Going from risk exploration to large-scale development in Chad, CNPC says it routinely follows the principle of seeking quality and efficiency while maintaining sustainable development.

CNPC's oil exploration and development activities in Africa are guided by the concept of mutually beneficial cooperation. The company strictly follows local policies, laws and regulations, and it upholds a multinational corporate culture of mutual respect, openness and compatibility, said Chen Shudong, general manager of CNPC International West Africa Ltd.

Chad has now seen a steady domestic supply of oil products from the N'Djamena refinery, and it exports part of the output to neighboring countries, laying a solid foundation for the nation's economy and strength.

In Niger, CNPC's West Africa branch had paid more than $1 billion in taxes to the government by the end of 2017. As of this May, the company had produced 5.28 million tons of crude oil in the country, according to its statistics.

 

Local residents collect water from a well dug by CNPC in Chad in February 2011 (COURTESY PHOTO)

Corporate responsibilities

In Sudan and South Sudan, CNPC has been fulfilling its social responsibilities by engaging in well-planned activities providing public benefits. The company has invested $120 million to support the development of agriculture, education, culture, medical care and infrastructure, benefiting more than 2 million African people.

By promoting the integration of diverse cultures within the company, employees with different cultural backgrounds can understand and trust each other and live in harmony with local communities, said Chen.

In the hinterland of Niger in the Sahara Desert, the shortage of water is an obvious problem. To raise the living standards of residents in nearby cities and towns, CNPC has dug 29 water wells and more than 40 water sources for use by local households and animal husbandry. The same arid condition is also a challenge in Chad. By the end of this July, a total of 65 water wells had been drilled by CNPC, benefiting 25,000 residents in 21 villages.

Apart from water shortages, gaining access to education in some African countries is still difficult for many children. The CNPC Niger branch says it has built 38 schools in areas neighboring its upstream projects and oil pipelines in the past few years. In Chad, three primary schools have been built and study materials have been sponsored at three local schools. A joint education program with a local university near the refinery plant has been maintained for years, while local students and technicians have been sent to China to receive further training and education.

Since CNPC entered the Chad market in 2003, the company has signed a large number of purchasing and service contracts with local enterprises, substantially boosting Chad's economic development.

FOCAC connection

With the N'Djamena refinery coming into production, the retail price of refined oil in Chad was reduced by about one-third, and the country eventually started to develop its own polypropylene processing industry.

According to Chen, the Forum on China-Africa Cooperation (FOCAC) is the most extensive, high-level and influential platform for communication between China and African countries.

"It will play an increasingly important role in promoting mutually beneficial cooperation between China and Africa in the field of energy, especially oil in the case of CNPC, and in building a community with a shared future," he said.

CNPC will strengthen cooperation with related countries in Africa in its oil and gas business through deep cooperation with resource countries, and it will take an active role in maintaining the partnership between China and Africa, said Chen.

Adhering to the business principles of being sincere, hands-on and honest, the CNPC says it aims to continue pushing forward its cooperation plans with African countries, assist Africa in developing itself alongside China, and facilitate regional industrialization and agricultural modernization, in an effort to achieve win-win results and realize shared development.

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