China hit an oil and gas output record last year – why is Beijing warning of a squeeze?
Beijing’s energy regulator has set more modest production targets this year after a record 2025 as mature fields deplete and extraction challenges mount
China’s oil and gas sector is facing “enormous challenges” in boosting reserves and expanding production after achieving record-high output last year as part of Beijing’s energy security drive, according to a report released by the National Energy Administration (NEA).
Total oil and gas production reached a new high of 420 million tonnes of oil equivalent last year, with crude oil output hitting a record 216 million tonnes, which the NEA said had “considerably enhanced self-reliance”.
But the energy regulator warned further expansion was becoming increasingly difficult as the sector faced a dual squeeze: declining output from mature fields and higher costs to develop new frontiers, in the report published on Tuesday.
Acknowledging the gap between falling legacy output and the time needed to bring new capacity online, the NEA set modest production targets for this year: maintaining crude oil above 200 million tonnes while ensuring natural gas output continued to “keep growing”.
The regulator noted that most established fields were depleting rapidly and required huge replacement volumes. “New discoveries involve difficult exploration and development, high costs and long lead times, as they are predominantly deep and ultra-deep formations, deepwater zones and nanoscale unconventional oil and gas,” the NEA said.