"Experts predict the era of low-priced oil of the last century is just a happy memory," a Chinese executive said at the Offshore Technology Conference last month. Surging Chinese oil demand is a big reason why. "As we enter the 21st century, China's dynamic economic growth will continue. By 2020, China's energy demand will be 13.8 million barrels per day," said Yuan Guangyu, president and chief executive officer of China Oilfield Services Ltd. (COSL). COSL is a subsidiary of China National Offshore Oil Co. Ltd., which also owns CNOOC, the firm's publicly traded offshore E&P company. COSL is listed on the Hong Kong Stock Exchange. The growth of China's gross domestic product (GDP) correlates to its energy demand growth on a two-for-one basis, he said. "If China's GDP growth is 8%, then energy demand growth is 4%." Last year China's GDP was $1.65 trillion, or 6.5 times greater than in the 1980s. Although China meets 64% of its energy needs from coal and 28% from oil and gas, use of the latter is growing rapidly. China is now the third-largest trading country in the world, due to its own modernization efforts and the increase in globalization, he said. (For more on energy demand in China, see this month's cover story.) As CNOOC is expanding, so is COSL. It will pursue more joint ventures, enlarge overseas cooperation, and pursue mergers and acquisitions, he said. "We would like to work hand in hand with all friends in the oil industry...." As it expands, COSL has several challenges ahead, Yuan said. It needs more resources-rigs, vessels, personnel-to expand beyond the Chinese offshore arena. It needs more of the latest technology. "Sometimes we are behind our international peers," he said. Finally, COSL needs to learn more about how to conduct business internationally, about laws, culture and business practices. COSL is a "life of field" company that provides contract drilling, treating fluids, logistics, well workovers, marine construction and integrated project management.

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