China Seeks Increase in Gas, Shale Oil Production
(Photo: REUTERS/Aly Song)
In an effort to increase domestic oil and natural gas production, several of China's biggest fossil fuel producers are ramping up production quotas especially in the tight oil and gas well industries. China is the world's largest importer of crude oil, and the country is also set to become the top importer of natural gas. In order to cut reliance on imports, China National Petroleum Corporation and Sinopec and looking for investment opportunities in domestic oil and gas producers.
For quite some time now, China's oil consumption has been inversely proportional to the country's oil production. Because of this, China has resorted to the rather costly import market. The country's massive energy requirement has led it to become the world's largest importer of crude oil. Many analysts are also noting that if domestic production will not improve, the country will also become the top importer of natural gas in the near future.
In recent months, China's natural gas production has experienced quite a bump. However, the growth rate of this particular industry has stagnated as companies and facilities continue to adhere to strict government policies regarding clean fuel and clean air.
PetroChina, which is controlled by the China National Petroleum Corporation, is laying out massive investments in an attempt to boost natural gas production in the country. As for Sinopec, the company recently announced its plans to drill 66 new natural gas wells and 23 new gas drilling gas stations.
During this year's first three quarter, Sinopec's crude oil production went up by just 0.2 percent. On the other hand, natural gas output went up by 5.9 percent. These figures were taken from the company's earnings report which was published last week.
In total, China's domestic crude oil production from January to September dropped by 1.9 percent compared to last year's production, according to China's Bureau of Statistics. In September alone, crude oil production in the country went down by 2.4 percent compared to its performance during the same time last year.
As for domestic natural gas production, it rose by 6.2 percent from January to September. In September alone, natural gas production went up by 8.5 percent compared to last year.
Despite improvements in domestic natural gas production, China's natural gas import is still rising, and many analysts expect that it will continue to rise.
During the first three quarters of this year, natural gas import rose to 28.3 percent compared to the same time last year. In September alone, natural gas import is up by 34 percent compared last year.