Sinopec to close four oilfields

The China Petroleum & Chemical Corp, or Sinopec, announced that it will close four least profitable oilfields in Shengli oilfield in Shangdong province, China. This will be the first time that a Shengli oilfield will be closed in five decades.

The Shengli oilfield is was affected by the oil crisis, having reported about 9.2 billion Yuan (US$1.4 billion) in losses last year.

“Many oil producers are facing the same kind of problem when crude prices fall,” said Gao Jian, a crude oil analyst at Shandong-based consultant SCI International to People’s Daily China.

“It is normally the last straw when oil producers shut down oilfields because after the shutdown, if they wanted to reopen them, they could stand to lose millions of dollars per day,” he said.

He also predicts that more oil rigs will close this year.