Speech by Dr. Zhong Ziran, Deputy Director-General of China Geological Survey at the International Symposium on Oil, Gas and Alternative Energy Resources in Circum-Pacific Region
October 16, 2007, Beijing

Distinguished Mr. President,
Distinguished delegates,
Ladies and Gentlemen,

　　Good morning!

　　It is my great pleasure to be present at the International Symposium on Oil, Gas and Alternative Energy Resources in Circum-Pacific Region. I would like , on behalf of China Geological Survey (CGS) and Mr. Wang Min, Vice Minister of Land and Resources and Director-General of CGS, to express sincere congratulations on the opening of the Symposium and high appreciation to the Chinese Petroleum Society and the Circum-Pacific Council for Energy and Mineral Resources for their great efforts in making excellent preparations for the Symposium.

　　The exploration and development of oil & gas resources and alternative energy resources in circum-Pacific region are of great significance for the safe, stable and sustainable supply of energy resources across the world and the healthy and sustainable development of world’s economy. The Symposium will serve as an important platform for experts from various countries to exchange information concerning oil & gas resources and alternative energy resources, oil & gas exploration and development and relevant geological theories and techniques. At the same time, it lays a good foundation for strengthening the collaboration in the field of oil, gas and alternative energy resources in the circum-Pacific region. China is one of the major countries in the world for possessing, producing, consuming and importing oil & gas resources, therefore it is of great importance for China to host the Symposium.

　　China is the second largest energy resources-consuming country in the world. With the rapid and sustainable economic development in China, the process of industrialization and urbanization is accelerating and the consuming structure is being upgraded, resulting in rapid increase of energy consumption and more severe contradiction of clean energy demand and supply. The oil volume consumed by China ranks the second in the world right after the USA, from 174 million tons in 1996 increased to 300 million tons in 2006. Since 1993, China has become a net oil importer from an exporter and the imported oil volume reached 170 million tons in 2006. With the rapid economic development in the future, the oil consumption in China will keep increasing.

　　China is the second largest energy producer in the world. Its energy resources consumption mainly depends on the domestic supply and the rate of self-supplied energy resources is 94%. The energy productive structure is as follows: coal being 76%, oil 13%, natural gas 3% and hydroelectricity 8%. The exploration and development of oil & gas resources has made great progress. By the end of 2006, the total proven geological reserves of oil are 26.5 billion tons, ranking the 12th in the world, and the total proven geological reserves of natural gas are 6.7 trillion cubic meters, ranking the 11th in the world. In 2006, China produced 184 million tons of oil, ranking the 5th in the world, and 58.4 billion cubic meters of natural gas, ranking the 12th in the world. Since the beginning of the 21st century, China has made a series of breakthroughs in the exploration and development of oil & gas resources and discovered 10 oilfields with the proven geological reserves over 100 million tons each and 8 large-scale gas fields, each has the proven geological reserves over 100 billion cubic meters. The average annual increases of production of oil and natural gas keep above 2% and 10% respectively.

　　China possesses a great potential for oil & gas resources. The reserves of oil & gas resources are only proven in limited areas, leaving vast areas unexplored. Situation about the exploration and development of oil & gas resources can be improved by enhancing the basic geological investigation in new areas, new fields, new layers onshore and key areas offshore. According to the latest estimate, 34% of oil reserves have been proven. It is estimated that the average annual proven reserves of oil will be about 900 million tons before the year 2020. It is hoped that the annual domestic production of oil may reach 200 million tons around 2010 and this production level may last 20 years. In terms of natural gas, 14% of natural gas reserves have been proven and it is estimated that the average annual proven reserves will be 400-450 billion cubic meters. The production of natural gas will keep rapid increasing and may reach above 100 billion cubic meters around 2010 and above 170 billion cubic meters in 2020.

　　China also possesses a huge potential for the unconventional fossil fuels. China is rich in coal resources and the geological reserves volume of coal-bed methane is more than 30 trillion cubic meters. In order to guarantee the safety of coal mines, mitigate the greenhouse effect caused by the emission of coalbed methane and optimize its energy structure, China will put the exploration and development of coalbed methane resources on the top of the agenda so as to accelerate the industrialization process of coalbed methane. In the Qinshui basin of Shanxi Province, the proven reserves volume of coalbed methane is above 100 billion cubic meters, in the year of 2006 the productive capacity reached more than 200 million cubic meters and almost 1 billion cubic meters for 2007. Besides, China has abundant oil shale and oil sands and the efforts of assessing, experimenting, researching and developing them are being increased year by year. Since the beginning of the 21st century, China Geological Survey has made significant progress in the investigation and assessment of natural gas hydrates and the samples of natural gas hydrates have been successfully explored and obtained in the South China Sea this year.

　　The Chinese government attaches great importance to the sustainable supply of oil and gas resources. China adopts the energy resources policy of “putting the economized use of resources at the first place, mainly relying on domestic supply, strengthening diversified development, enhancing environmental protection and valuing cooperation in order to establish a stable, economized and clean energy supply system”. China mainly relies on its own domestic supply to meet the demand of energy resources, which serves as the basic strategy for guaranteeing the safety of China’s energy resources. By accelerating the development of energy resources industry and enhancing the capacity of domestic energy resources supply, China strives to build a diversified energy resources structure advanced in all respects, with coal as the basis, electric power the center, oil & gas and other new energy resources developing rapidly. China is also making efforts in adjusting the structure of energy resources and raising the percentage of clean and renewable energy resources step by step.

　　In order to realize the above objectives and increase the guaranteeing capacity of energy resources for the sustainable economic development, Chinese government has adopted a series of measures, including enhancing the building of large-scale coal bases; actively developing hydroelectricity and nuclear electricity; promoting the exploration and development of domestic oil and natural gas so as to stabilize and increase the domestic production of oil and gas; promoting the development and utilization of coalbed methane; encouraging the development of renewable energy, such as wind energy, solar energy, bio-energy, etc.; and actively developing and using geothermal and sea energy.

　　As Chinese government’s functional department in charge of the management of oil and gas resources exploration and development, the Ministry of Land and Resources will carry out the management of exploration and mining rights of oil and gas resources according to the law, strengthen the control and supervision of the exploration and development of oil and gas resources, promote the stable increase of reserves and production, encourage both foreign investment in China and Chinese petroleum corporations’ overseas investment, carry out the international cooperation in the field of exploration and development of energy resources, and strives to increase the guaranteeing capacity of oil and gas resources for the sustainable economic development.

　　As the national geological agency engaged in the basic and non-profit geological investigation with the financial support of the central government, China Geological Survey (CGS) will abide by the requirements of the state planning and response to the social needs to increase constantly the level of basic geological investigation and assessment. According to the principle of “deepening the development in the eastern part of China, promoting the development in the western part, accelerating the developing pace in offshore areas, exploring new areas and enlarging the development outside of China”, CGS will actively carry out the specific offshore oil & gas investigation, enlarge the oil and gas investigation in new areas, new fields and new layers onshore and provide guidance to petroleum corporations in the risk exploration investment.

　　Oil, gas and alternative energy resources have become an important field in the international economic cooperation. Due to the unconformity of the geographic distribution of energy resources on the Earth, a majority of countries cannot solely rely on their own domestic resources for the economic development. It is inevitable for various countries and regions to carry out cooperation in energy resources according to the principle of “equality, mutual benefit and reciprocity”. There is an urgent need for new geological theories, technical methodology and equipment as the degree of difficulty and risk about the exploration and development increases. New discoveries and breakthroughs in the exploration of oil and gas resources and research and development of alternative energy resources depend more and more on scientific innovation. It is the common wish of countries and region across the world to share the theories and techniques about oil, gas and alternative energy resources.

　　Ladies and gentlemen, China needs the world and the world also needs China. Let ‘s join hands to strengthen exchanges and promote cooperation to make greater contributions to building a harmonious world and promoting the sustainable development of energy resources industry in circum-Pacific region!

　　Finally, wish the Symposium a complete success!
　　Thank you!