【By Liu Bai, Observer】"China's first billion-ton shale oil oilfield is born", "another billion-ton oilfield in the Bohai Sea", "first exploration of a deep to ultra-deep clastic rock billion-ton oilfield"...
Marching toward the depths of the earth and exploring the vast blue sea, China has always regarded energy security as a "major national matter". Through a series of technological breakthroughs, it has achieved historic leaps, firmly holding the bowl of energy in its own hands, injecting strong confidence into national security and development.
Bloomberg published a long article on November 4, which also noted that facing increasingly intensified geopolitical tensions and energy supply risks, China has invested heavily since the first round of Sino-US trade conflicts, promoting domestic production recovery through technological upgrades. Since then, China's annual crude oil production has increased by 13%, and natural gas production has increased by more than 50%. This year's production growth is expected to set new historical records, equivalent to adding nearly the scale of Indonesia's oil production and nearly the scale of Algeria's natural gas production to the global supply volume.
August 7, 2024, Hainan, China discovered the world's first ultra-deepwater large shallow gas field. Visual China
"China is in a more favorable position"
The report mentioned that according to the Chinese perspective, domestic oil and gas production is crucial for energy security, and Chinese officials are making every effort to ensure everything goes smoothly.
About 20 kilometers from Tianjin Port, on the Bohai Sea, a large metal building stands on a green sea surface - CEPJ of the Caofeiyan 11-1 Oilfield. This platform is the core facility of the Caofeiyan oil and gas field and is also a symbolic project that China has invested tens of billions of dollars in, aiming to reduce reliance on competitors.
For a long time, China has tried to reduce the risks associated with being the world's largest energy consumer and importer. But this ambition has become more urgent and unprecedented in recent years, both due to geopolitical tensions and Trump's return to the White House, which has turned trade into a weapon. Last month, the United States added two Russian oil giants to the blacklist, causing impact on Chinese refineries.
Since 2019, China's energy giants have invested 468 billion US dollars in drilling and exploration, an increase of nearly a quarter compared to the previous six years, making CNPC the largest spending oil company globally during this period, surpassing giants such as Saudi Aramco. With China strengthening its "self-reliance" strategy, investment pace will almost certainly not slow down in the coming years.
"In the past few years, the whole world has experienced energy shortages," said a senior executive of China's oil and gas industry at a meeting last week. "Natural gas and liquefied natural gas (LNG) are like tap water and bottled water. Tap water is cheaper, more reliable, and logistics are simpler. Therefore, we promote domestic production."
This has become a hidden pain for global oil and gas giants. For a long time, multinational companies from ExxonMobil to British Petroleum have been used to viewing China as the engine of fossil fuel demand. Over the past decade, China has contributed more than 60% of the global oil demand growth.
Taking Shell as an example, one of the world's largest LNG suppliers is investing billions of dollars in new supply projects, expecting global LNG demand to grow by 60% by 2040, mainly driven by China. Shell's CEO Wael Sawan said in June that natural gas could account for 20% of China's energy structure in the future, while it is currently just a single digit.
"We believe China is a huge market," said Hassan Al-Ayami, vice president of Saudi Aramco's Ras Tanura refinery, at an industry conference last month. "Although China's current energy demand may be stable, demand will definitely rebound after 2027."
However, the past trends can no longer accurately predict the future. Currently, China's new energy vehicles are gradually taking over the market, and energy demand growth is slowing down, while domestic oil and gas production is continuously increasing.
This year, other energy competitions have already appeared in China's energy market. Bernstein Research estimates that by around 2030, China's domestic natural gas production will exceed demand growth; at that time, China may also increase pipeline gas imports from Russia, further reducing interest in imported LNG.
Despite this, global energy companies are still betting on exports. In the first ten months of this year alone, nearly 100 billion cubic meters of new LNG export capacity were approved, making it the second-highest annual scale in history. Wood Mackenzie predicts that the investment in new LNG export facilities in the United States alone this decade will reach 100 billion US dollars.
August 14, Shanghai LNG station expansion project (Phase I) site. Visual China
Trump once claimed that China would purchase more US capacity in a trade truce agreement, and even invest in Alaska projects. But just like in other areas such as agriculture, China is not without other options.
"The rise in domestic production and stable demand in China helps counteract the efforts of the Trump administration to seek energy dominance, providing China with a buffer space," said Erica Downs, a senior researcher at the Columbia University Center on Global Energy Policy. "They are in a completely different, even more favorable position than during Trump's first term."
Currently, China still consumes far more than it produces, and this situation is unlikely to change in the short term. However, China now ranks seventh in global crude oil production, surpassing several OPEC members; in the natural gas sector, it ranks fourth.
This influence reflects the development evolution of China's major oil and gas enterprises. The report states that since the 21st century, the scale and technical maturity of these enterprises have significantly improved. CNPC, CNOOC, and Sinopec have grown into giants in production, refining, and petroleum trade, competing side by side with international rivals such as Chevron and Shell. Over the past decade, CNPC's annual oil and gas production has increased by nearly a quarter, reaching 1.8 billion barrels of oil equivalent.
"The production of China's major oil and gas enterprises exceeded expectations, which not only surprised the market but also themselves," said Michal Medan, director of the China Research Program at the Oxford Institute for Energy Studies. "This gives China a sense of control, especially in the context of declining oil demand."
After Trump's first term initiated a trade conflict, China increased its domestic oil and gas exploration and development efforts.
In 2024, China's total oil and gas production reached over 400 million tons of oil equivalent for the first time. Among them, crude oil production reached 213 million tons, close to the historical peak, and natural gas production was 246.4 billion cubic meters, continuing to increase by more than 10 billion cubic meters for eight consecutive years. Compared to 2018, crude oil production rose by nearly 13%, and natural gas production grew by more than 50%.
This year, both production levels are expected to set new historical records, equivalent to adding nearly the scale of Indonesia's oil production and nearly the scale of Algeria's natural gas production to the global supply volume.
Although China has not yet announced specific production targets for the future, a source revealed that the "14th Five-Year Plan" is still expected to list upstream oil and gas development as a key task, continuing to strengthen energy self-reliance and controllability.
"The bowl of energy should be held in our own hands"
The report noted that China's emphasis on oil and gas security can be traced back to the late 1950s, when China learned lessons from the deterioration of Sino-Soviet relations: it cannot rely too much on other countries. Daqing Oilfield is a symbol of self-reliance, and its development gathered technical and equipment resources from across the country.
This awareness was reawakened ten years ago. At that time, the Organization of Petroleum Exporting Countries (OPEC) launched a price war to suppress American shale oil, leading to a sharp drop in international oil prices, which affected China, leaving it in a difficult situation with high costs in old oil fields.
This situation soon changed.
In 2018, during the most intense period of the Sino-US trade conflict, China made a determination to "spare no expense" to increase domestic oil and gas exploration and production, to "firmly hold the bowl of energy in its own hands."
For example, carbon capture projects developed by China will allow Shengli Oilfield to add an additional 3 million tons of crude oil production over the next 15 years. Sinochem also plans to maintain an annual production of 24 million tons of oil through shale gas exploitation.
All of this is thanks to the large-scale investments in recent years. At that time, the three major oil and gas companies in China formulated oil and gas development action plans until 2025. In 2019, CNPC increased its capital expenditure by 16%, reaching 42 billion US dollars; that same year, the expenditures of CNOOC and Sinopec both increased by more than 20%. By comparison, the total expenditures of ExxonMobil, Chevron, Shell, and BP increased by just over 5% that year.
March 18, Dongying City, Bohai Bay area, Sinochem Shengli Oilfield deploys two drilling rigs to work at full speed for oil drilling construction. Visual China
The report believes that later events such as the Russia-Ukraine conflict proved that China's strategy was correct.
Now, China's goal is no longer just maintaining old oil fields, but also advancing shale oil and coal-to-oil and coal-to-gas projects.
The biggest breakthrough occurred at sea. Between the end of 2018 and 2024, CNOOC's domestic production (all from offshore) increased by 60%. Among them, the Bohai Oilfield Group performed the best, now exceeding land-based oil fields and becoming the largest oil-producing area in the country. The platform where the CEPJ platform is located has 60 oil and gas fields and over 200 platforms, with a daily output of over 650,000 barrels of oil equivalent, accounting for one-tenth of the country's total. The platform is composed of green channels, yellow railings, and gray pipelines, with an appearance similar to modern platforms in the Gulf of Mexico and the North Sea. Chinese drilling companies have long cooperated with Western oil giants, absorbing and improving technology. CNOOC has shortened the time from discovery to commissioning from three years to two years, faster than many international companies.
Over the past five years, CNOOC has contributed two-thirds of the national production increase and is expected to continue growing at least until 2027. The company plans to continue developing new blocks in the Bohai Sea and the South China Sea, facing technical challenges including the first near-10,000-meter ultra-deep-sea well drilling.
"When I talked to some workers in 2018, they didn't believe they could achieve the production increase target," recalled Lin Chen, vice president of Lazard Energy's oil and gas research at an energy consulting firm. "But later they said: 'In China, anything is possible.'"
Even if future domestic demand for fossil fuels in China begins to decline, stable domestic production remains an advantage for the country, and China is steadily moving in this direction.
"China is increasingly emphasizing self-reliance, whether in technology, energy, or other areas," said Downs from Columbia University. "Energy security remains the top priority."
"Stabilizing oil and increasing gas" situation further consolidated
As described in this article, China's oil and gas exploration has achieved leapfrog development in recent years. A series of technological breakthroughs have helped production steadily increase, building a solid barrier to safeguard national energy security.
Technologies such as "two-wide and one-high" seismic exploration, the first prototype of permeability logging, and the 12,000-meter special deep well automated drilling rig have efficiently assisted in the exploration and development of deep and ultra-deep oil and gas. Continuous progress in horizontal well optimal drilling and completion, volumetric fracturing, and three-dimensional development supports rapid unconventional oil and gas production. Technologies such as tri-component flooding and carbon dioxide miscible flooding have effectively promoted the continued stabilization of old oil fields in the east.
"Deep Sea No. 1", "Seahorse No. 1", "Sea Base Series", and other "national heavyweights" have significantly enhanced China's deep-water oil and gas engineering construction capabilities.
Data from the "China Oil and Gas Exploration and Development Development Report 2025" show that from 2019 to 2024, the total investment in national oil and gas exploration and development reached 2.24 trillion yuan, with an average annual investment of about 374 billion yuan, an increase of 48% compared to 2018.
Especially the proven reserves continue to grow. From 2019 to 2024, the annual average new oil and natural gas proven geological reserves were 1.4 times and 1.5 times that of 2018 respectively, forming a new peak period of reserve growth.
The production equivalent has also reached a new historical high. In 2024, the domestic oil and gas production equivalent reached 409 million tons, maintaining a continuous growth trend of millions of tons for eight consecutive years, further consolidating the "stabilizing oil and increasing gas" development situation.
Only this year, China's oil and gas exploration field has seen frequent good news.
In March, the Jiyang shale oil emerging oilfield with a billion-ton proven reserves in Sinochem Shengli Oilfield was officially reviewed and filed by the Ministry of Natural Resources. This is the first batch of proven geological reserves of shale strata oil recognized after the Ministry of Natural Resources issued the first "Shale Strata Oil Reserves Estimation Specifications" in January, marking the birth of China's first billion-ton shale oil oilfield.
The National Energy Administration once stated that China has rich shale oil resources, which is an important alternative field for promoting domestic crude oil production and stability. Expanding shale oil production scale comprehensively and promoting the shale revolution is of great significance for relying on domestic resources and ensuring national energy security.
In 2024, China's shale oil production broke through 6 million tons, with a year-on-year growth of more than 30%. During this period, Sinochem's shale oil annual production was 705,000 tons, an increase of 308,000 tons compared to the previous year. Sinochem plans to reach 2 million tons of shale oil production by the end of the "14th Five-Year Plan".
In the same month, China Offshore Oil Company announced that China has discovered the Huizhou 19-6 billion-ton oilfield in the eastern sea area of the South China Sea. This is the first time China has found a large, integrated oilfield in the deep to ultra-deep clastic rock of the offshore area, demonstrating the potential of oil and gas exploration in the deep to ultra-deep areas of the nearshore.
In early May, the Fanyu 11-12 platform of CNOOC Shenzhen Branch successfully started production in the eastern sea area of the South China Sea. This is the first time China has applied an unmanned platform for remote development of an offshore heavy oil field. It has made new breakthroughs in multiple aspects such as typhoon production mode, remote resumption, and complex crude oil processing, further enhancing the standardization and intelligent level of China's marine oil and gas equipment design and construction.
On August 7, CNOOC announced that the newly added proven reserves of the Lingshui 36-1 gas field discovered in the southeastern waters of Hainan were smoothly reviewed and filed by the relevant national departments, with proven natural gas geological reserves exceeding 100 billion cubic meters, making it the world's first ultra-deepwater super-shallow large gas field.
Zhu Changgui, CNOOC's chief geologist, stated that the successful exploration of the Lingshui 36-1 gas field further improves China's independently established Chinese characteristics deep-water complex oil and gas resource exploration and development technology system. The implementation of the gas field reserves also completes the last piece of the "South China Sea Trillion Cubic Meter Gas Field" construction map.
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