Chinas oil drilling industry is one of the few bright spots in the international oilpatch with about 1000 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 tolds. Chinese oil sold within the nations 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 4500 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 Chinas 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 Chinas fledgling offshore projects as well as participate in the actual drilling he said. Amoco Corp &lt;AN> for example has reported a discovery in 1000 feet of water in the South China Sea. Were encouraged said Alfred Munk manager of Amocos 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 2000. Chinese crude reserves total 23.6 billion barrels with ultimate resources estimated at 69.3 billion barrels.
CHINESE OFFICIALS SAY DRILLING OUTLOOK BRIGHT