Oil and gas production in China

Chronicle

2024

Discovery of 100 bcm natural gas field

On August 7, 2024, China announced the discovery of a large gas field in the South China Sea. Its reserves are estimated at 100 billion cubic meters.

The field, dubbed Lingshui 36-1, was discovered by China National Offshore Oil Corporation (CNOOC). It is located southeast of Hainan Island. The average sea depth in this area reaches 1.5 thousand m, while the gas-bearing basin lies at a depth of 210 m under the seabed. The new field complements China's discovered geological reserves of natural gas in the resource-rich South China Sea, as well as in basins off Hainan Island and at the mouth of the Pearl River. The total volume of reserves is about 1 trillion cubic meters.

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Word Oil

However, the opening of Lingshui 36-1 could escalate disputes with other countries. In addition to the PRC, Brunei, Vietnam, Taiwan, Malaysia and the Philippines claim their rights to waters in the South China Sea. At the same time, USA European Union Japan both their allies support the claims of the listed states against. China The discovery of the gas field is expected to make matters worse.

Tensions are rising in the South China Sea as the region is a globally significant waterway known for its abundant resources of oil, natural gas and fish. It is also one of the busiest shipping lanes in the world, with more than 20% of global trade passing through it. Therefore, despite promising prospects, the development of oil and gas resources in the South China Sea is fraught with diplomatic and political problems.

At the same time, China is the largest importer of natural gas in the world. In 2023, he imported 120 million tons of this fuel in a gaseous and liquefied state for a total of $64.3 billion.^[1]

China's first ultra-deep shale gas field discovered

On January 23, 2024, the Chinese integrated energy and chemical company China Petroleum & Chemical Corporation (Sinopec) announced the opening of China's first ultra-deep shale gas field with large reserves. The site, called Hexingchang, is located in Sichuan.

The field was discovered as part of the Deep Earth project, which is being implemented by Sinopec specialists. The reserves of the Hesingchang site, confirmed by the State Ministry of Natural Resources of China, are estimated at 133 billion cubic meters of gas. This is the first shale ultra-deep field of this scale in the country.

Hesinchan Field

The Sichuan Basin, located in southwestern China, is known for its rich natural gas deposits. Sinopec has previously discovered a number of large fields in the region, such as Puguan - the largest sour gas field in China, as well as Yuanba - the world's first ultra-deep sour gas field in offshore strata. In addition, Fulin shale gas deposits with reserves of about 10 billion cubic meters were discovered. And the Weirong site became the first deep shale gas field in China with proven reserves of more than 100 billion cubic meters.

In 2022, Sinopec announced the discovery of a shale gas field with reserves of approximately 146 billion cubic meters. It is located near Qijiang District (Chongqing City) and Xishui County (Guizhou Province). This discovery, the company says, will help ensure the country's energy security. The reserves lie mainly at a depth of 3500 meters. Sinopec emphasizes that in order to develop such deposits, a number of complex technological tasks must be solved.^[2]

2023

China for the year opened oil fields by 400 million tons and gas by 400 billion cubic meters. m

China in 2023 opened oil fields for 400 million tons and gas for 400 billion cubic meters. Wu Haiyan, chief planning specialist of the Ministry of Natural Resources of the People's Republic of China, spoke about this in September 2024.

It should be said that we are constantly strengthening the capacity to provide resources for new emerging industries that are strategically important, he said.

The total volume of proven natural gas reserves in the region exceeded 1 trillion cubic meters. In 2024, CNOOC plans to increase production to a record 700-720 million boe.

China updated the record for oil and gas production - more than 390 million tons

At the end of 2023, China updated the record for oil and natural gas production - the figure was more than 390 million tons of oil equivalent. Such data in the State Administration for power Affairs of the PRC (NEA) led in January 2024.

According to Interfax, citing NEA materials, about 208 million tons of oil were produced in China in 2023, which is more than 3 tons, or 1.6%, more than a year ago. The rise was largely due to the growth of offshore production - up to 62 million tons.

China updates record for oil and natural gas production

Shale oil production in China at the end of 2023 reached the level of 4 million tons, and this is also the maximum for the country. As for gas, its production in China in 2023 reached 230 billion cubic meters. m. According to statistics from the State Administration for power Affairs of the PRC, the Middle Kingdom in 2023 ensured an increase in the production of blue fuel of 10 billion cubic meters per year.

China, along with India, is a major consumer and exporter of hydrocarbons in the world. It is in the direction of these countries that Russia, which has fallen under Western sanctions, is increasing oil and gas supplies. However, both China and India set the task of providing economies with their own hydrocarbons and seek to increase their oil and gas production. However, the PRC provides oil, according to some estimates, about a third of its consumption.

As the agency reported Reuters in a publication dated January 9, 2024, domestic oil production in China from 2018 to 2023. grew on average by 2% per year on the country's aspirations to increase production to strengthen energy security. At the same time, as the publication adds, in 2015-2018. oil production in China decreased by about 12% due to a decrease in the volume of hydrocarbons in developed wells on land.^[3]

2022: Increase in oil production by 2.9%, gas - by 6.4%

By the end of 2022, China increased oil production by 2.9% to 204.67 million tons, according to data from the State Statistical Office (GSU), which were published in mid-January 2023. In December 2022, production amounted to 16.87 million tons, which is 2.5% more than in December 2021.

China's refinery capacity fell 3.4% in 2022 compared to 2021, the first annual decline since 2001, as tight Chinese control of COVID-19 affected the economy and fuel consumption. In 2022, refiners processed 675.9 million tons of crude oil, data from the National Bureau of Statistics (NBS) showed on January 17, 2023, or about 13.5 million barrels per day (bpd). In 2001, the volume of refining decreased by 0.3% compared to the previous year, the NBS data showed. This is less than 14.5 million barrels per day in November and a record figure of 14.8 million barrels per day in June 2021.

China in 2022 increased oil production by 2.9%, gas - by 6.4%

After eight months of consistent year-on-year declines between January and August 2022, refinery refining began to recover in September as the government changed fuel trading policy by issuing a large quota package to boost exports. In the fourth quarter of 2022, refined fuel exports, including diesel, gasoline, aviation fuel and marine fuel oil, increased by 61% compared to 2021 and amounted to 18.3 million tons.

The launch of the new PetroChina crude oil plant with a capacity of 200 thousand barrels per day in Guangdong and the Shenghong Petrochemical plant with a capacity of 320 thousand barrels per day in Jiangsu also helped maintain production levels in the last months of 2022. NBS data also showed that natural gas production in December 2022 increased by 6.5% compared to 2021 to 20.4 billion cubic meters. m, a monthly record, as state oil companies stepped up drilling to meet winter heating demand.

Crude oil production remained above 4 million bpd - a level that the dominant public sector believes is strategic to secure domestic supplies as companies stepped up development of more complex tanks.^[4]

2021

Oil production in thousands of barrels per day by country in 2021

2012

In November 2012, there was speculation that China had stopped filling its strategic oil reserves. This is evidenced by data from the International Energy Agency, according to The Financial Times. The agency came to this conclusion by analyzing the data on the demand and supply of oil and petroleum products in the PRC.

Thus, in the first quarter of 2012, the difference between supply and demand amounted to 650 thousand barrels per day. In the second, it was reduced to 510 thousand barrels. In July, supply outstripped demand by only 100 thousand barrels, and in August-September the difference between them fell to zero.

As a result, according to IEA data, in the first 7 months of 2012, China pumped 106 million barrels into its underground oil storage facilities. Most of these supplies were provided by Kazakhstan and Russia.

Chinese strategic reserves after the completion of the construction of the necessary infrastructure in 2020 will be the second in the world in terms of capacity. Beijing began creating them in 2001 in the event of a war that could disrupt fuel supplies to the country.

Now terminals of the second stage are being built with a capacity of 200 million barrels. Their construction should be completed by 2014. When the construction of the third stage ends, China will have 500 million barrels of oil in its storage facilities. Only the United States has more - 700 million^[5].

It is worth noting that many analysts considered the Chinese injection of oil into their reserves one of the reasons why oil prices in 2012 are kept at a fairly high level. During the year, Brent crude oil did not fall below $90 per barrel, averaging $100-105 per barrel, despite the debt crisis and recession in Europe.

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