The payment will be made to Sinopec's parent company China Petrochemical. Price regulation shields China's relatively poor rural sector from sharp rises in international prices but leads to slim margins or losses for many Chinese refiners. The government also announced plans to move to market-oriented natural gas pricing in 2006 to encourage investment in exploration.
OPEC in maiden visit
Organization of Petroleum Exporting Countries President Sheikh Ahmad Fahd al-Sabah met Vice Premier Zeng Peiyuan and National Development and Reform Commission Director Mai Kai in the first such visit in the group's 45-year history. Analysts say OPEC, whose members produce 40% of the world's oil, underestimated the strength of China's demand growth in the last two years and is keen to reassert its market influence in the world's second largest and fastest-growing energy market. China's crude oil imports are predicted to rise from 2.54 million barrels per day in 2005 to more than three million per day in 2006. OPEC is expected to cut production this year.
No decision on reactors
China missed a year-end deadline for handing out an US$8 billion contract to build four nuclear reactors, prompting speculation that it plans to postpone its choice indefinitely. Companies from the US, France and Russia are vying for the contract to build China's first third-generation reactors. Plans to make a final decision by the end of the year are thought to have been derailed by the high prices quoted by the foreign firms. China intends to spend US$49.56 billion on 30 new nuclear reactors by 2020.
Coal mine closures
Beijing announced it would shut 5,290 coal mines following safety inspections in 2005, considerably more than earlier estimates of 4,000 closures. China has about 34,000 coal mines, 24,000 of which are small mines producing 10,000 to 30,000 tons of coal a year. These small operators account for the majority of the estimated 5,000 deaths in China's mining industry each year. All mines are now required to make financial safety deposits to be used to compensate the families of accident victims.
CNOOC bounces back after Unocal
CNOOC will pay US$2.3 billion for a 45% stake in a Nigerian oil field in its first major investment since its failed bid to take over US group Unocal last year. The agreement, which still requires approval from the two countries' governments, covers a deep-water area of the oil-rich Niger Delta region.