China suffers big year-on-year production falls

The oil industry in China is suffering the biggest year-on-year production falls since 1995, according to a recent report from Money Control.

China is one of the world leaders in producing oil, with the International Energy Agency recording Beijing's output at about 4.1 million barrels a day. However, there has been a sudden interruption in the amount been produced in the country, with barrel output roughly 200,000 barrels per day lower than it was last year.

These figures correspond with the fact that China is importing record amounts of oil. This has led to a fuel gap in Beijing, with a decrease in output being met with an increase in consumption. The country has therefore been forced to look further afield for fuel, with official data from the country's General Administration of Customs showing that it imported a record 5.95 million barrels a day.

There are two primary reasons why China is suffering from a fall in production. The first is that the state-owned oil companies are struggling to pump more from older oilfields such as Daqing, which has been excavated since the 1960s.

China has also been suffering from a large supply outage at a large offshore oilfield operated by ConocoPhillips. The Penglai 19-3 field was shut down after major leaks, and its recovery is crucial to the domestic oil production in the country.

Posted by Claire Manning