U.S. and Chinese Oil and Gas Government And Industry Leaders Meet to Explore Joint Exploration and Development Opportunities

U.S. and Chinese oil and gas industry representatives and government officials are meeting this week at the first U.S.-China Oil and Gas Industry Forum in Beijing, China, to explore ways that China and the United States can work together to develop reliable and economical sources of oil and natural gas. The group also plans to identify and facilitate new opportunities for U.S. corporations in China's petroleum industry.

"The United States and China both value a prosperous and sustainable economy and understand that energy fuels that economy," said Secretary of Energy Bill Richardson and Secretary of Commerce William M. Daley in offering their strong support of the Forum, which runs November 2-4. "We both understand the significant role that oil and natural gas will continue to play in our future energy and commercial relationship. We fully support collaboration that will enable both nations to achieve their energy and economic goals well into the next century."

The United States' oil and gas industry, already the largest investor in China's petroleum sector, is interested in increasing cooperative exploration and development work with the Chinese oil and gas industry. The Forum will help identify and facilitate new opportunities. The areas of interest expected to be discussed include: governmental policies related to the oil and gas industry, increasing U.S. industry participation in Chinese oil and gas development and markets,U.S. - Chinese cooperation in regional energy development and transportation, and increasing the use of U.S. oil and gas technology in China.

Robert Kripowicz, Acting Assistant Secretary for Fossil Energy, and Jan Kalicki, Counselor to the Department of Commerce, will lead the delegation of U.S. officials and more than 50 oil and gas industry executives. Minister Bao Xuding, Vice Chairman of the State Development and Planning Commission (SDPC), will lead the Chinese delegation, which will include representatives of the government and the Chinese oil and gas industry.

China's economic growth has made it the second-largest energy-consuming nation in the world. This rapid growth has outstripped China's domestic oil production and, in 1993, China became a net oil importer. Imports currently account for 15% of total consumption, but they are projected to increase to between 40 and 50% of China's consumption by 2020.

The United States is the world's largest consumer of energy and has been dependent on oil imports for between 40 and 50% of supply for more than a decade. That dependence could jump to 60% by 2010 if we are not able to find and recover more domestic resources or dramatically lower our consumption.

Both nations share the goals of improving energy security and fully developing their domestic energy resources while protecting the environment. The United States was the first country to develop its petroleum industry and remains a leader in petroleum technologies, equipment and services. Because of our mature fields and complex geologies both onshore and offshore, we have developed advanced technologies that are helping us to produce more of our domestic resources. The oil and gas industries of China and the United States could benefit from a discussion of the challenges and opportunities they face in satisfying growing energy demand.

The Department of Energy and China's State Development and Planning Commission (SDPC) are the lead implementing agencies for the Energy and Environment Cooperation Initiative signed by former Secretary of Energy Federico Peña and Planning Commission Minister Zeng Peiyan on October 29, 1997 during the first U.S./China Summit. This agreement with the United States is aimed at helping to meet China's energy needs in a way which protects the environment. DOE leads the implementation of the Cooperation Initiative along with the U.S. Department of Commerce and the President's Office of Science and Technology Policy. The U.S.-China Oil and Gas Industry Forum was established as part of the Initiative.

The U.S. government is committed to strengthening bilateral cooperation with China, and we view the U.S.-China Oil and Gas Industry Forum as an important vehicle for achieving the energy and environmental goals of both nations.

- DOE -

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