Greater Chinese reliance on crude oil imports

According to Petroleum Intelligence Weekly (PIW) 9 September 2002, Chinese state-controlled PetroChina produces 2.09 mbd of crude oil, which is slightly less than Exxon-Mobil or Royal Dutch/Shell. However, the production of PetroChina’s largest field is declining at 5% per annum, forcing China towards greater reliance on crude oil imports.

China produced an average of 3.44 mbd in the first half of 2002, up 2.9% compared to the first half of 2001. The bulk of this increase came from the smaller offshore fields of China National Offshore Oil Corp. (CNOOC), which produced 0.49 mbd during the first half of 2002. Experts say new discoveries are possible and new technology could extend field life, but PetroChina will increasingly need to seek alternative crude sources to supply China’s needs as its domestic production may drop by about 2.3% per year.

 

Chinese talks with Russia’s Yukos to take 0.4 mbd from the Verkechonskoye field over the border from Daqing have not been confirmed, and plans for other crude oil pipelines from Russia could take years to materialise.