China Sees Sharp Fall in Output at Daqing

China CNPC Long-Term Plan Sees Sharp Fall in Output at Daqing
by David Winning
Feb 27, 2007

BEIJING - China National Petroleum Corp. (CNPC.YY) said Tuesday that crude oil and natural gas production at its flagship Daqing oilfield may slump by more than 50% in five decades.

The projection is significant because Daqing currently accounts for around a quarter of China's total domestic production, and lower output would have to be covered by new finds or more crude imports.

According to a long-term plan drawn up by CNPC, China's biggest oil producer by capacity, annual crude oil and natural gas production will total between 20 million metric tons and 25 million tons in 2060.

This compares with the 43.38 million tons of crude pumped in Daqing last year, equivalent to 871,000 barrels a day.

Daqing has been in production since 1963 and output has been declining rapidly in recent years despite efforts to drill in peripheral areas and use enhanced oil recovery to keep existing wells in operation.

Crude output at Daqing, which is located in northeastern China's Heilongjiang province, fell 3.5% last year after falling 3% in 2005.

PetroChina Co. (PTR), the listed unit of CNPC, loses about 16 million tons of production capacity each year due to the declining reserves of its aging fields.


© 2007 Dow Jones Newswires.