Global Times - China's oil output only meets half demand

China's oil output only meets half demand

Source: Global Times
[15:48 February 09 2010]
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Although China has exceeded Iran to become the fourth largest crude oil producer in the world in 2009, as world's second-largest oil consumer, its output can hardly meet half of its demand and the country still has a long way to go to seek oil in overseas market, a China Business News (CBN) report said Tuesday.

According to the statistics from China's Ministry of Land and Resources (MLR), China's crude oil output in 2009 made up 5.4 percent of the total output globally and became the fourth largest oil producer after Russia, Saudi Arabia and the US.

Data from the National Development and Reform Commission shows that in 2009, China's crude oil output reached 189.4 million tons.

However, the 189.4 million tons of output can not reach half of the demand of the country.

An unnamed expert from the Economics & Development Research Institute of the China Petroleum and Chemical Corporation (Sinopec) said that an easy way to calculate the total demand of the country is to add up the amount of the domestic output and the imports.

Calculated by this, added with the imports amount of 103.79 million tons, China's total demand of oil reached 393 million tons. And China only produced 48 percent of the oil that it needs.

Also, the increase of the oil output is lower than the increase of the demand, the CBN report said.

"During the recent three to four years, China's oil output remains 180 million tons to 190 million tons and the year-on-year growth was from 1 percent to 2 percent, and it is hard to say whether the output can reach 200 million tons in 2015," the expert said.

However, from 2000, the year-on-year growth of the country's oil demand exceeds 5 percent, the expert added.

An official from the Sinopec emphasized that it is basically impossible for China to exceed the output of the US. China's production of the oil is in stable growth and it has been already very hard for the country to keep the output above 180 million tons.

"For 2009, the China National Petroleum Corporation (CNPC) may see a slight decline on the previous basis of 100 million tons and Sinopec's output in 2008 was about 41 million tons and may increase 3 percent to 5 percent in 2009," the official was quoted as saying.

"The China National Offshore Oil Corporation (CNOOC) probably can see a 10 percent growth compared with the previous year, but its base was too small," he added.

Yang Hua, CEO of the CNOOC predicted on February 3 that the company's output may reach about 31 million tons in 2009.

Even in the optimistic period of the economic cycle, the country's output is very limited, the report said. From 2006 to 2008, the increase of the output of the CNPC was only about 1 million tons a year.

The official from the Sinopec said that the domestic newly arising oil demand was mainly solved through imports.

With a total output of 496 million tons, Russia ranked in the first place, followed by Saudi Arabia and the US.

According to the report, China exceeded Iran mainly because impacted by the financial crisis, Iran's oil output dropped 4.3 percent compared with the previous year. Although China also saw a slight drop, yet its 0.4 percent drop was much smaller than that of Iran.