This is great news. China is developing a fungible asset in an economically iffy part of the world? They take all the risks and end up increasing the oil supply? What's not to like?
That oil never gets to the world market - just helps to further the PRC's goal of natural resource acquisition.
Couple this with the Petrokhazakhstan buyout by China National, CNOOC's failed takeover of Unocal and their lending a financial helping hand to Putin in re-nationalizing prime Yukos assets and you can see that the PRC is taking steps to hoard oil and protect distribution routes in preparation for a move on Taiwan in the next 5-10 years.