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China could see its oil production growth taper off in the coming years as the recent new discoveries could prove challenging to develop while output at mature fields declines, according to analysts and forecasters.
Since 2019, China has boosted its crude oil production every year, by around 2% per year, as the state-owned oil giants have endorsed the official government policy to ramp up exploration and production to make China – the world’s top crude oil importer – less dependent on imports.
In the first nine months of 2023, China’s crude oil production rose by 1.9% percent year on year, according to official Chinese data.
Chinese state oil firms are spending record amounts of money to boost exploration and production, and most of these efforts have paid off in recent years as output has grown.
For example, earlier this year, state oil and gas giant CNOOC raised its capital expenditure budget for 2023 to a record high to support growth in its reserves and production.
China Petroleum & Chemical Corporation, commonly known as Sinopec, announced last month the first oil and gas flows from the deepest onshore well in Asia, which was recently completed.
But after several years of growth, China’s oil production increase is set to slow or flatline next year, according to analysts and OPEC.
State giants now have to chase the “high-hanging fruit”, as most new fields are ultradeep and challenging to develop, Angus Rodgers, head of Asia Pacific upstream analysis at Wood Mackenzie, told Reuters.
OPEC placed China among the top drivers of non-OPEC supply growth this year behind the U.S., Brazil, Kazakhstan, Norway, Guyana, and Mexico, in its Monthly Oil Market Report for December. But the cartel doesn’t expect China to contribute to non-OPEC supply growth in 2024 at all. OPEC expects China’s oil production next year to be essentially the same as it is in 2023—at around 4.56 million barrels per day (bpd).
