China Inc Joins The Big League in Gas Services

Global oil and gas companies are increasingly turning to China for services and equipment, attracted by lower costs and a newly acquired expertise that is challenging more established rivals.

State-run and privately controlled Chinese rig makers, oil and gas services and engineering firms are showing up in the supply chain everywhere from the Middle East, the North Sea and North America to frontier areas like Mozambique.

Chinese yards, having come from nowhere in less than a decade, are building more jack-up rigs - the most common offshore rig used for shallow water drilling - than all the other yards in the world put together, data from industry consultants IHS Petrodata shows.

Helped by strong government support, plentiful labour and an abundant supply of raw materials like steel, China could become a major offshore oil equipment manufacturing hub in less than 10 years, industry executives say, just like Singapore and South Korea overtook the United States and Europe in the 1990s.

To stay ahead, both Keppel and Sembcorp are increasingly building more sophisticated equipment, an area where Chinese firms still lack expertise. Leading the Chinese overseas expansion are state-controlled shipyards and units of state giants China National Petroleum Corp (CNPC), parent of PetroChina , Sinopec Group and China National Offshore Oil Corp (CNOOC).

(reuters.com Edited by Topco)