China oil giant CNOOC to lift output as trade war increases energy security worries
The company plans a 6.6 per cent rise by 2020, as the government seeks to reduce the country’s dependency on imported energy sources
CNOOC, China’s dominant offshore oil and gas producer, plans to boost output as part of a government initiative to lessen the country’s reliance on imported energy sources, particularly as a trade war with major supplier the US intensifies.
The firm is targeting oil and gas output of 500 million barrels of oil equivalent in 2020, up 6.6 per cent from 469 million boe last year and above this year’s target of 470 million to 480 million boe, it said on Thursday, after announcing a rise in first-half profit.
China’s foreign oil dependency ratio could rise to almost 70 per cent this year from 67 per cent last year and 64 per cent in 2016 as rising demand cannot be met by domestic output, according to CNPC Research Institute of Economics and Technology.
At the same time, natural gas import dependency – which rose to 39 per cent last year from 29 per cent in 2012 – will increase further this year as consumption of the cleaner-burning fuel to fight air pollution grows much faster than domestic output.
US exports of crude oil to China surged 144.7 per cent year on year in the first half to US$4.37 billion, while those of liquefied natural gas (LNG) jumped 210 per cent to US$351 million, according to the US Census Bureau.
The government has ordered state energy firms to increase output to help enhance national energy security, according to statements posted on the websites of CNOOC’s parent China National Offshore Oilfield Corp and PetroChina’s parent China National Petroleum Corp early this month.
Beijing early this month proposed slapping a 25 per cent duty on US LNG if the US broadened its tariffs on Chinese goods, but has so far refrained from doing so on US crude oil.