Page 10 - AsianOil Week 25a

AsianOil EAST ASIA AsianOil

China aims to boost oil and gas production

PROJECTS & THE Chinese government has said it wants to Bohai Bay, onshore Sichuan Province, in the
COMPANIES increase the country’s crude oil production by Ordos Basin and in the Xinjiang region.
1% to 193mn tonnes (3.87mn barrels per day) China’s oil output fell from a peak of 4.31mn
this year and its natural gas output by 4.3% to bpd in 2015 to 3.79mn bpd in 2018, owing to a
181bn cubic metres. slide in oil prices that began in August 2014 and
The National Energy Administration (NEA) saw Brent briefly fall below $28 per barrel in Jan-
set the targets in its annual production plan, uary 2016.
which was released on June 22. Crude output Production recovered, however, after Chi-
climbed 1.3% year on year in 2019 to 3.84mn nese President Xi Jinping ordered the country’s
bpd, while gas production expanded by 7.8% to developers in July 2018 to ramp up domestic
173.6 bcm. output, following growing trade tensions with
The NEA said the focus would be on expand- the US. These tensions exposed China’s heavy
ing key energy production bases in the offshore reliance on energy imports. National oil pro-
duction climbed in the first five months of this
year to 3.91mn bpd, as the state majors kept
domestic oilfields online during the country’s
prolonged lockdown in response to the corona-
virus (COVID-19) pandemic.
The country’s national oil companies
(NOCs) are focusing their investment on
domestic projects over foreign operations
this year. With the economy having begun
to slowly recover, China’s planned upstream
projects will likely see mild delays rather than
lengthy deferrals.
When announcing capital expenditure cuts
earlier this year, CNOOC Ltd and Sinopec pro-
tected their domestic upstream projects. The
former said its cuts would focus on international
operations, while Asia’s largest refiner allocated
most of its capex cuts to its downstream division.
China National Petroleum Corp. (CNPC) has
said it will adjust its 2020 operations in line with
market trends.™

Japan concerned less by oil

imports, more by fuel demand split

PERFORMANCE THE Japanese petroleum sector is less concerned “If we need more crude, we can always buy
by OPEC+’s efforts to reduce global crude sup- oil from the spot market,” said Sugimori, who is
ply than it is with the widening split in domestic also JXTG’s president. “The toughest issue for us
demand for jet fuel and automotive fuels. is the wide gap in the recovery of demand by type
Petroleum Association of Japan (PAJ) presi- of fuel. We need to make a difficult operational
dent Tsutomu Sugimori said on June 18 that the adjustment by increasing output of gasoline and
country’s weakened oil demand – a remnant of gasoil while keeping kerosene fractions at low
the country’s coronavirus (COVID-19) social levels.”
distancing measures – had offset any reduction The country’s crude oil imports shrank by
in supply. 36% year on year in May to 1.92mn bpd, accord-
OPEC+ agreed on June 7 to extend produc- ing to preliminary Ministry of Finance figures
tion cuts of 9.7mn barrels per day (bpd) until released on June 17. Oil purchases fell to their
the end of July. Reuters quoted several unnamed lowest level since April 1991.
sources as saying on June 15 that Saudi Aramco JXTG estimates that the country’s gasoline
had reduced July-loading crude volumes for at demand dropped by 25% y/y in May, while gasoil
least five buyers in Asia. demand slid by 11%.

P10 www. NEWSBASE .com Week 25 25•June•2020