The hottest transaction in the back garden the cha

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"Back garden" transaction: Civil oil production chaos in Shengli Oilfield

"smell it? It's the smell of money!"

On October 2, it rained in Dongying, Shandong Province, and the air was filled with the smell of oil. Near the shooting range in Lijin County, Dongying City, a local oil boss surnamed Li pointed to several "kowtowing machines" in the distance and said so

the oil boss's favorite oil wells belong to Binnan Oil Production Plant of Shengli Oilfield. In the past month, boss Li has been running to successfully contract these oil wells

Dongying is the mining hinterland of Shengli Oilfield, the second largest oil field in China. In addition, there are many private oil bosses similar to boss Li in Binzhou and Zibo, the other two main oil production battlefields of Shengli Oilfield. These privately contracted oil wells and even oil field blocks are hidden in the oil production team of the whole Shengli oil field. On the surface, they are no different from other oil wells in Shengli oil field. However, according to the data provided by a local insider, Shengli Oilfield now produces nearly 30million tons of crude oil annually, and the total output of privately contracted oil wells accounts for more than 20%

a few years ago, hundreds of "oil bosses" were forcibly cleaned up and reorganized in Northern Shaanxi oilfield and Xinjiang Oilfield thousands of miles away. In sharp contrast, the private capital attached to Shengli Oilfield realized the wealth dream of crazy gold rush here

Shengli Oilfield, as a black gold paradise for collecting private capital, is still attracting more people

Shengli oil field under conflict in several important oil production areas of Shengli oil field, the contradiction between Shengli oil field and the local government and people has a long history, among which Dongying is the heart of Shengli oil field

Dongying City was founded in 1983 and developed based on Shengli Oilfield. At the initial stage of the establishment of the city, the principal of Sinopec Shengli Oilfield Branch also held the leading position of Dongying Municipal government. In the mid-1990s, the oilfield business began to operate independently. After the separation of government and enterprises, the interest conflict between Shengli Oilfield and the local government became increasingly tense

a local government official disclosed to us that the reason why Shengli Oilfield has bred large-scale privately contracted oil wells is that the oil wells have served as a tool for Shengli Oilfield to "coordinate relations and alleviate contradictions" with local governments and local residents

it is learned that around 2001, the interest conflict between Shengli Oilfield and the local government gradually worsened, and the Petroleum Administration Bureau of Shengli Oilfield came forward to coordinate. At the same time, Shengli Oilfield Branch divided some oil wells to the Petroleum Administration Bureau as a cost, and the Petroleum Administration Bureau distributed the oil wells in its hands to the local oil regional offices. However, as an administrative department directly under the governments at all levels, the local oil district offices have no right to conduct business externally. Therefore, after several turnover, the divided oil wells have been attached to the entity companies controlled by the oil district offices

the above-mentioned government officials confirmed to us that there are corresponding entity companies under the oil district office, which coordinates the relationship between the oilfield and the local government. Most of these companies are established to "facilitate" the processing of oil wells. Each district and county in Dongying City has oil district offices, and each county oil District Office controls more than 60 oil wells

in addition, some government departments also took the opportunity to divide up oil wells. In some oil production concentration areas, local villagers obstructed the normal operation of the oil production team for various reasons. People from the oil district office had to seek assistance from the public security organ after being repeatedly refused to communicate. As compensation, the public security bureau put forward the request for allocation of oil wells to the oil district office. After the public security bureau without business operation power obtained the oil well, it attached the oil well to the name of the security company within its jurisdiction, and the enterprise security company took on the profit of the oil well

some of these oil wells separated from Shengli Oilfield are used by local governments or functional departments to generate income, and the other part is privately contracted by some "related households". According to a local oil boss, in some economically backward towns and townships, even a number of oil wells were allocated to the village committee in the name of "poverty relief wells"

the main scope of work of Shengli Oilfield covers 28 counties (districts) in 8 prefectures and cities in Shandong Province, including Dongying, Binzhou and Zibo. Another oil boss who also has contracting business in Zibo disclosed to him that in several other major oil production areas, public relations are handled at the cost of oil wells everywhere. "There are too many oil wells of this nature, and it is estimated that only people inside the oilfield know the specific data." Said the oil boss

under Sinopec Shengli Oilfield Branch, there are three companies with special identities, namely, Daming group, Dongsheng Group and Shengkai group

these three companies are collectively referred to as "three industry companies". The so-called "three industry company" refers to a company that does not involve the main business of Shengli Oilfield, such as exploitation, drilling and exploration. These three companies are nominally secondary units of Shengli Oilfield, but they are responsible for their own profits and losses and have flexible operation space

according to local government officials, since Shengli Oilfield previously allocated oil wells to various oil district offices, there were obvious management conflicts because they were subordinate to different departments. At the same time, in order to facilitate the management of human, financial and material resources in Shengli Oilfield, the Oilfield Administration Bureau began to transfer some oil wells to the third industry company for foreign cooperation and development

"if the oil well is assigned to the third industry company, the private owner can sign a cooperation agreement with the third industry company, so that the oil field can also create its own income." Said the oil boss

a technician from an oil production plant in Shengli Oilfield disclosed that, in principle, the oil wells allocated to the third production company are abandoned wells with a daily output of less than 2 tons, or oil wells with relatively unstable output. Even so, these oil wells still have production value. However, Shengli Oilfield Company, from the perspective of investment cost, feels that "there is no need to reinvest, it is better to hand over to private companies for cooperative development"

on the premise of win-win situation, a large number of oil wells are divided into three production companies. Once these oil wells are transferred to three production companies, their internal preparation in Shengli Oilfield will be cancelled immediately. The cancelled oil well production does not need to be reported to Shengli Oilfield, nor will it be included in the production statistics of Shengli Oilfield

this operation mode undoubtedly creates an opportunity for seamless cooperation between the third industry companies and private bosses. Oil bosses go to the third industry companies one after another to try to win more oil wells

however, there is no fixed model for the cooperation between private bosses and third industry companies. There is no unified standard for both benefit distribution and contract terms. There is a lot of room for expansion and contraction only for the oil well contract fee. According to several local oil bosses, after signing the development agreement with the company affiliated to the private owner, the third industry company can choose to remove all the above ground equipment of the oil well, and then the private owner can build it at his own expense. These above ground equipment include pumping units, oil tanks, plank houses, transformers, etc. In addition, the third industry companies can also lease these supporting facilities to private individuals who have experienced abnormal phenomena when the hydraulic system of the tensile testing machine works, and the rental standards are also different

"the main thing is that your relationship is not in place. If the relationship is dredged up, you can give a little of the contract fee and rent symbolically. If the relationship is not dredged up, you have to do everything by yourself." An oil boss said

in addition to flexible handling of contracting details, the policy of allocating oil wells to the third industry company is gradually relaxed. A number of oil wells in Shengli Oilfield with large daily production and stable oil production were also under the jurisdiction of the third production company under different names, and were finally taken into the pocket by oil bosses with "strong relations"

according to the investigation, Shengli Oilfield is located in the oil production area of Tangfang Town, Gaoqing County, Zibo City. There are a large number of privately contracted internal oil wells, which belong to Daming group, one of the three production companies

in the Xicheng District of Dongying, a Township Leader contracted 47 internal oil wells at one go. Most of these wells have a daily crude oil output of more than 5 tons, and the output is stable

"the third industry company is equivalent to the back garden of Shengli oil field. Now if individuals want to contract, they have to find them. If they have a good relationship, they can bring the good wells of the oil production plant." An oil boss said

an employee of an oil production plant in Shengli Oilfield revealed that there are about 11 oil production plants in Shengli Oilfield. There are separate mines under each oil production plant, and there are different numbers of oil wells under each mine. The number of oil wells in the whole Shengli Oilfield is 20071, and these oil wells are assigned well numbers. Once the oil wells are divided into three production companies by the Petroleum Administration in various names, the well numbers representing the ownership of the oil wells will become a string of meaningless numbers

it is learned that although these privately contracted oil wells have been written off in terms of preparation, according to the agreement, these oil wells still play the role of "making up the numbers"

according to the oil boss, Shengli Oilfield will assign task indicators to the following oil production plants every year. The oil wells in each oil production plant are connected with oil pipelines. After unified confluence, the production data will be reviewed by the flow meters of each oil production plant, and then transported to Qilu Petrochemical. In order to fill in whether the universal insurance can achieve the output task assigned by the 7% income layer, the tertiary industry company even requires that the crude oil from private oil wells can only be sold to the designated oil production plant at a slightly lower market price to replace the task index of the oil production plant

in addition, private bosses can also choose to buy and sell freely, but the vast majority of bosses will still choose to sell crude oil to designated oil production plants, because "only by building a good relationship can we put a long line and hang a big fish"

"gamblers' game

the current market price of crude oil is about 4000 yuan per ton. If only one ordinary oil well with a daily output of 3 tons is calculated, the gross profit in one month is as high as nearly 400000 yuan. An oil boss calculated an account. Taking the investment in an oil well as an example, the costs required include contracting fees, equipment rent, operating expenses, local public relations processing fees, etc. Considering the expansion space of various costs, the maximum investment of an oil well will not exceed 500000 yuan

although the profit margin is large, it is not easy to successfully win the oil well and ensure normal operation

according to the investigation, the digital sensor of the oil electronic universal testing machine adopts several different working principles. Before selecting the intended oil well, the bosses will fully understand the output of the oil well out of consideration of investment risk. They will also call out detailed information such as oil reserves and geological structure through the internal relations of Shengli Oilfield. Even so, the oil boss interviewed still described oil well contracting as "gambling"

"no one can be 100% sure that the money will be made back. We can only control the risk to the minimum. Some oil wells with rich reserves in theory will not be able to produce oil after they get hold of them," said the oil boss. "Finally, it depends on luck."

in addition, according to the investigation in Dongying, the contradictions and conflicts caused by the oil wells are also heard. In addition to using various political and commercial relations to win the oil wells, the oil bosses also have outstanding contradictions with local villagers, such as monomers, initiators, additives, inks, adhesives, plastic resins, silicone rubber and inorganic materials, which need to meet the requirements of the new national standard

according to the agreement, after the private owner signs the contract with the third industry company, all public affairs around the oil well shall be the responsibility of the oil owner, including compensation for the land occupied by local villagers, and the damage caused by oil well operation to nearby residents

Copyright © 2011 JIN SHI