A doctor who travels through two eras

Dongshan Province, Dongying Region
Accompanied by officials from the Development and Reform Commission of Shandong Province, Shengli Petroleum Administration Bureau, and relevant departments of Sinopec, Lin Sanqi arrived at Tianhong Petrochemical Plant, a privately-owned oil refinery on the coast of Bohai Sea.

Several administrative staff members in jackets also came along, and Section Chief Song was among them, looking very serious.

Lin Sanqi glanced back and thought to himself that this guy was quite frivolous in front of him, but in front of outsiders, he had a deadpan expression that could scare people to death.

The several leaders in charge present didn't dare to look at the men in their administrative jackets, but instead enthusiastically surrounded Lin Sanqi.

Dai Huayan, deputy director of Shengli Oilfield Administration, pointed to the oil refinery in front of them and said:
"Chairman Lin, this Tianhong Petrochemical plant in front of us is one of the well-known oil refineries in our Dongshan area. At its peak, its annual output could reach 150 million tons, which is quite a large-scale oil refinery among local refineries."

Lin Sanqi thought to himself, "A production of 150 million tons is enough to surpass the entire country's refined oil production in 64."

The oil refinery in front of us is just one of many local refineries, not to mention the large state-owned refineries.

Having experienced the extreme poverty of the 1960s, Lin Sanqi felt even more deeply how rapidly the country's economy was developing.

So he puffed out his chest, feeling a sense of pride, and nodded with a smile:
"Great, great, really great! Our country's oil refining and petrochemical industry has finally caught up."

Director Dai smiled wryly:

"Chairman Lin, what's so great about that? We used to be short of oil, and we went through so much trouble to find it. But now the tables have turned, and we have an oversupply of oil refineries."

Look at this Tianhong Petrochemical Plant in front of you, isn't it quiet? Actually, they've already stopped production. A perfectly good company has gone bankrupt just like that, and we feel very sorry for them.”

Lin Sanqi blinked, somewhat puzzled, and asked:

"We have a surplus of refined oil? Then why do we still import so much oil every year? Shouldn't we import according to the country's needs in a planned way? It's a waste of our country's precious foreign exchange."

Lin Sanqi knew that there was a serious oversupply of steel in China, but steel companies were still importing large quantities of iron ore.

Foreign iron ore companies are exporting iron ore at a frenzied pace while simultaneously raising prices wildly; it's impossible to say there's nothing fishy going on.

The most likely explanation is collusion between insiders and outsiders, and that a little girl in Australia has trillions in savings.

Director Dai suddenly blushed and coughed a few times:
"Well, well, I can't explain this either. After all, the qualifications for importing oil are only held by a few companies. We, hehe..."

Lin Sanqi immediately pictured a piece of fatty meat in his mind, the hands of anyone who had handled it covered in grease that couldn't be washed off.

Peng, the deputy director of the National Development and Reform Commission, who was standing nearby, quickly changed the subject:
"The main reason is that the domestic new energy industry has developed too rapidly in recent years. Not to mention anything else, just look at the electric two-wheelers, three-wheelers, and a large number of electric vehicles that have been produced, none of which need to be refueled."

Behind this energy revolution is that my country's oil refining capacity has exceeded 10 billion tons per year, surpassing the United States to become the world's largest, but the capacity utilization rate has fallen to about 70%, with a structural overcapacity of more than 3 million tons.

In 2014, five national departments issued the "Special Action Plan for Energy Conservation and Carbon Reduction in the Oil Refining Industry," which strictly ordered that crude oil primary processing capacity be reduced to less than 10 billion tons by the end of 2016 and that production capacity with energy efficiency below the benchmark value be eliminated.

These "outdated capacities" account for as much as 15%, and the policy also explicitly requires the complete elimination of atmospheric and vacuum distillation units with a capacity of less than 200 million tons per year, and promotes the concentration of capacity towards industry giants through "capacity reduction and replacement."

This sounded quite official, but Lin Sanqi understood it: all oil refineries with outdated technology or low production capacity would be shut down in one fell swoop.

Then the oil refining industry was concentrated in the hands of a few large refineries.

Whether this "state advances, private sector retreats" policy is good or bad is not something that a small businessman like Lin Sanqi can question.

But at least the country has seen this drawback and is making changes; it can no longer continue to import crude oil recklessly and without a plan.

Looking at the small-scale oil refinery in front of him, Lin Sanqi thought that he needed to adjust his thinking.

His original plan was to build a large-scale oil refining plant with an annual production capacity of 1000 million tons, and transfer it directly to Daqing in another time and space.

Now it seems that I can set up more factories and place them in oil fields across the country, which would save a lot of transportation costs for refined oil, right?

Transportation conditions in the 1960s, while not exactly abject poverty, were certainly a major bottleneck severely restricting logistics and the economy.

"Leaders, how many local oil refineries like Tianhong Petrochemical are there in Dongying area, or even in Shandong Province?"

Deputy Director Peng replied: "Yes, quite a lot. Let me put it this way, basically all local oil refineries will have to be shut down, even those that are doing well. This is a major headache for us right now."

Lin Sanqi thought to himself, "We can't just cut off state-owned enterprises, so we have to target private enterprises."

Of course, the problems of outdated equipment and serious pollution in local oil refineries are also objective realities. If we don't cut this one, then who will we cut?
Director Dai also smiled wryly:
"We have a lot of local oil refineries in Dongshan Province. As you can see, Chairman Lin, we have Shengli Oilfield in Dongying. The working area is mainly distributed in 28 counties of 8 cities including Dongying and Binzhou."

There are currently 17 local oil refineries relying on our Shengli Oilfield. These are the large-scale refineries; those with an annual output of less than one million tons are not included.

The sudden closure of so many local refineries will not only affect the local economy, tax revenue, and employment, but will also have the greatest impact on the financial industry.

These oil refineries involve investments of billions or even tens of billions of dollars, and it's not entirely the boss's money. A significant portion of the money comes from banks; it's borrowed.

These local oil refineries are now facing closure or outright bankruptcy, owing so much money to banks. If this issue isn't handled properly, it could lead to major chaos.

Lin Sanqi glanced at Section Chief Song, who then raised an eyebrow at him.

So that's why Shandong treated this capitalist dog so warmly—that's where the problem lies.

The elimination of these small oil refineries was inevitable, as national policy restrictions eliminated the possibility of other companies taking over.

Once the policy was introduced, the country could no longer tolerate these polluting enterprises. No province would approve them, and the equipment of these local refineries would become nothing but a pile of garbage.

Now that Lin Sanqi, this "ragpicker," has suddenly appeared out of nowhere, isn't that exactly what Dongshan Province needs from all sides?

A group of people accompanied Lin Sanqi as he wandered around the oil refinery.

The equipment at this oil refinery is nothing short of industrial monsters. Towers, heat exchangers, reactors, storage tanks, and chimneys are so tall they seem to reach the clouds, making people feel incredibly small when they stand in front of them.

Furthermore, with so many densely packed pipelines, even if Lin Sanqi was an outsider, he knew the technological sophistication and the massive investment involved in these oil refineries.

As Lin Sanqi walked, he asked the factory engineer next to him:

"Mr. Du, I see that your oil refinery is quite old. Look at all this equipment, it's very outdated. To give you an example, if I were to relocate your entire factory and then reassemble it in another location, do you think it would be very difficult?"

Engineer Du chuckled:
"Chairman Lin, actually, assembling the production line isn't that difficult. It's just a matter of patience and meticulous work. We have a complete set of blueprints, and as long as the workers install it according to the blueprints, there shouldn't be any problems."

Another point is that our production line equipment is semi-automated. Well, large oil refineries are fully automated, so ours is a bit behind, but it also greatly reduces the difficulty of operation.

It simply involves building the supporting power plant and additive plant; the actual production process is quite simple.

Lin Sanqi breathed a sigh of relief. With his previous experience at the power plant, he knew that assembly would not be a problem.

As for the issue of replacing damaged parts in the future, this bottleneck was broken after he transported various machine tools to the 1960s, and any kind of part could be produced.

"Engineer Du, take your Tianhong Refinery as an example, can these production lines produce aviation kerosene?"

Engineer Du smiled confidently:
"Any kind of oil can be produced. Aviation kerosene is not a high-tech product. It was something that could be produced during World War II. Now it's 2016, so it's even less of a problem."

Lin Sanqi had a better understanding:

"How much would it cost if I wanted to buy your oil refinery?"

At the mention of money, Deputy Director Peng and several other leaders' eyes lit up:
"Chairman Lin, Chairman Lin, you're just buying one oil refinery? There are 12 similar oil refineries in Dongshan Province right now, hehe, why don't you go and take a look at them all?"

Lin Sanqi thought to himself, "What tricks could I possibly figure out? I'm not a professional."

Back in the 1960s, the shortage there was of refined oil; the priority was to get cars, trains, and airplanes running.

Then consider downstream products, such as chemical fibers, fertilizers, tires, asphalt, etc. (End of Chapter)