• 3 hours UK On Track To Approve Construction of “Mini” Nuclear Reactors
  • 7 hours LNG Glut To Continue Into 2020s, IEA Says
  • 9 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 12 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 14 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 15 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 4 days New Video Game Targets Oil Infrastructure
  • 4 days Shell Restarts Bonny Light Exports
  • 4 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 5 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 days Rosneft Signs $400M Deal With Kurdistan
  • 5 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 6 days Conflicting News Spurs Doubt On Aramco IPO
  • 6 days Exxon Starts Production At New Refinery In Texas
  • 6 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 days VW Fails To Secure Critical Commodity For EVs
  • 7 days Enbridge Pipeline Expansion Finally Approved
  • 7 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 7 days OPEC Oil Deal Compliance Falls To 86%
Alt Text

Will Demand For Offshore Rigs Ever Recover?

Offshore drilling companies have struggled…

Alt Text

OPEC Looks To Permanently Expand The Cartel

OPEC Secretary General Mohamed Barkindo…

Oil & Gas 360

Oil & Gas 360

From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…

More Info

Chinese Oil Production Collapses To 7-Year Low

Oil pipelines

Uncertainty over oil prices is hurting Chinese oil production

Daily oil production in China – the world’s second-largest crude consumer after the United States – fell to a seven-year low in October, according to data from the country’s statistics bureau. Chinese oil production is falling as the country’s national oil producers remain cautious about raising production in the face of oil price uncertainties.

China’s oil output dropped 11.3 percent from the same time a year ago to 16.1 million tons, according to the National Bureau of Statistics. The figure is up from September when China produced 16.0 million tons, but the daily average was 3.8 MMBOPD, the lowest since May 2009, and down from 3.9 MMBOPD in September.

“Producers have not ramped up output even as oil prices rebounded in October. Many of them see the uptick in prices as unsustainable,” a Beijing-based crude trader told Reuters.

Chinese oil production has taken a hit both on and offshore, with major producer PetroChina (ticker: PTR) reporting that crude output for the first nine months of the year fell to 696.6 MMBO from 722.9 MMBO a year earlier, while China National Offshore Oil Corporation (CNOOC) recorded a 7.7 percent decline in oil and natural gas production in the third quarter.

Domestic crude oil supply for the first ten months of the year fell 7 percent to 3.99 MMBOPD from 4.30 MMBOPD for the same period in 2015.

Chinese producers looking abroad are uncertain about their future in the U.S.

While PetroChina reported a 94 percent decline in net income for the first nine months of 2016, PTR and many of its fellow Chinese oil and gas companies are stockpiling cash to use outside of the country. PetroChina reported a 25 percent increase in cash on-hand in its Q3 report, and sources close to the company’s leadership said it is looking at deals from Africa to the Middle East and North America to boost overseas production rather than continue to pump capital into uneconomic fields at home.

(Click to enlarge)

In 2015, Chinese investment firm Yantai Xinchao paid $1.3 billion to buy Permian Basin assets from Tall City Exploration and Plymouth Petroleum, and continues to look for more deals in the area. The rush of capital from both abroad and from U.S. oil and gas producers into the Permian is also creating opportunity in other plays like the Eagle Ford and the Bakken, according to ConocoPhillips’ EVP of Production, Drilling and Projects Al Hirshberg.

The result of the U.S. presidential election has many Chinse oil firms uncertain though, according to The Wall Street Journal. Many believe that Trump could be convinced of the value of exporting more oil and gas, but most are unsure about how the president-elect will view Chinese firms as operators of U.S. assets. Related: Expert Commentary: 5 Reasons To Be Bullish On Oil

It has been “a constant barrage of questions about what does this really mean,” said David Wochner, who leads the policy and regulatory practice at law firm K&L Gates.

“As you start to think about Asian investment—Chinese or otherwise—into U.S. energy infrastructure, and taking a stronger role perhaps in the U.S. energy market, and then having the ability to export the commodity to their home country, I think it becomes a bit of a guessing game at this point,” he said.

Wochner advises China’s energy companies to engage early with the new administration to form a better sense of how regulations may change.

By Oil & Gas 360

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Joe on November 15 2016 said:
    As long as the Middle East is willing to give away their oil, China is content to leave their's in the ground. Why not?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News