Xinjiang hoping oil will fuel region's economic growth

By Li Woke

The Xinjiang Uyghur Autonomous Region will invest 53 billion yuan ($7.76billion) in its oil and petrochemical industries in 2010 in order to promote regional economic growth, a local media outlet said Wednesday.

"Xinjiang will focus on the construction of oil refineries, the oil and gas chemical industry and the coal chemical industry in 2010, with total investment reaching 53 billion yuan, 15 percent higher than 2009," said a report on the Tianshan online portal.

Located in northwest China, Xinjiang has an area of 1.66 million square kilometers, and a population of more than 20 million people, many ethnic minorities.

It is rich in oil and gas resources, with an estimated capacity of 20-40 billion tons of oil and 1,240 billion cubic meters of natural gas.

The central government accelerated oil exploration efforts when Xinjiang was identified as a target area in China's "western development" strategy in 2000.

Between 1990 and 2001, over 120 billion yuan ($17.58 billion) was injected into local oil exploration.

As a result, total proven oil reserves climbed to 2.62 billion tons with 647.23 billion cubic meters of natural gas, including the top three oil fields, Zhundong, Tuha and Tarim.

"In the long-term, the investment is to ease China's dependence on foreign oil to meet surging consumption," said Shanghai-based analyst Yang Hong, with Oriental Oil and Gas Network.

"But in the short-term, oil oversupply will be shown in the domestic market," he said.

As the crude oil production, refining and petrochemical industries developed rapidly, crude oil processing capacity in Xinjiang grew 10 percent in the last two years.

"However, speaking at the government level, the 53 billion yuan investment is profoundly necessary," Yang said.

"Xinjiang's backward economy and prominent ethnic conflicts have led the Chinese government to use economic policies to achieve political stability," he added.

Source: Global Times