China's major oil fields have shown minimal output growth so far in 2012 as gas production continues to soar.
National Bureau of Statistics data shows crude oil production at the nation's largest oil fields under-performed in comparison to the booming gas industry. China's total crude output rose only 1.6% year-on-year to 100.6 million metric tonnes in the first half of 2012, compared to a 6.3% rise in total gas output to 53.6 billion cubic metres.
Major onshore oil fields are suffering, after decades of capped production have reduced efficiency, and the lack of any new onshore discoveries are likely to result in flat output across the sector. Oil companies are drilling as fast as possible just to maintain current production levels. CNPC alone drilled 18,000 development wells and almost 1,800 exploration wells last year - 4,600 of which were in Daqing, the nation's largest oil field. Industry analyst, Huang Xinhua, remarked: “It is quite good if these fields can maintain steady production for the next five to ten years.”
Despite recent large discoveries, crude output at CNOOC fell 14.5% year-on-year in the first half of 2012 to 17.9 million tons, caused in part by curbed production at the troubled Penglai 19-3 oil field. According to ConocoPhillips CEO and Chairman Ryan Lance, the field is capable of producing around 120,000 barrels-per-day, but was only producing 30,000 barrels-per-day in July.
Meanwhile, gas output continues to boom. Total gas production at CNPC rose 6.5% year-on-year to 40.3 billion cubic metres in H1, driven by increased output at its Xinjiang fields. Sinopec also saw a healthy 14.2% rise in gas production to 8.2 billion cubic metres during the same period, helped in part by its New Star fields in Northern and Western China.