China’s oil and gas sector is facing “enormous challenges” in boosting reserves and expanding production after achieving record-high output last year as part of Beijing’s energy security drive, according to a report released by the National Energy Administration (NEA).
Total oil and gas production reached a new high of 420 million tonnes of oil equivalent last year, with crude oil output hitting a record 216 million tonnes, which the NEA said had “considerably enhanced self-reliance”.
But the energy regulator warned further expansion was becoming increasingly difficult as the sector faced a dual squeeze: declining output from mature fields and higher costs to develop new frontiers, in the report published on Tuesday.
Beijing has pushed domestic exploration and output in recent years to reduce import dependence amid an increasingly challenging geopolitical landscape.
Disruptions in the Strait of Hormuz since earlier this year have sent shock waves through global energy prices, underscoring supply vulnerabilities.
