China's new five-year plan for its oil and gas sector shows an increase in crude oil output of 200 million tons by the year 2020, with natural gas production capacity up by 360 million cubic meters.
The report, jointly published by the National Development and Reform Commission and the National Energy Administration on Thursday, predicted that the Asian giant will add one billion tons of proven reserves every year from 2016 to 2020. The new fossil fuels will be used mainly to ensure domestic supply for the rapidly developing nation of over 1 billion people.
In the first 11 months of 2016, crude output stood at 181.21 million tons - a year-over-year drop of 7.2 percent compared to 2015. Natural gas imports spiked by 16.5 percent in the same period.
Crude oil production in the Asia-Pacific is falling at a unique rate, according to a report from Wood Mackenzie, with China accounting for about half of the decline, Wood Mac's Asia-Pacific upstream research director Angus Roger said earlier this week.
The report's findings are worrying for China, which recently reported that its dependency on imported crude had deepened, reaching 64.4 percent of domestic demand in 2016. The reason for this dependency was the availability of cheap fuel due to the oil price crisis, but also because of the maturation of the country's superfields, which made national output uncompetitive.
China is also expanding its influence in the global oil game by investing in Iran. Iranian media reported yesterday that China will invest $3 billion in upgrading the Middle Eastern county's refining capacity.
According to Deputy Oil Minister Abbas Kazemi, China has already "opened the financing" for the Abadan refinery's upgrade. Iran's oil and gas infrastructure has suffered the results of years of neglect because of insufficient maintenance funds during the sanction years as well as access to new technology and equipment.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More