Foreign Correspondence

[Amaunet]

This should heat up the Oil Wars as each passing year China and the United States become more desperate for energy.


Big China oilfield 'running low'

Last Updated: Wednesday, 24 March, 2004, 14:40 GMT

China needs oil to fuel its booming industries
Managers at China's biggest oilfield have cut their output targets, in a sign that reserves are dwindling.
Production at Daqing oilfield in north-eastern China will fall by about 7% a year between now and 2010, state media reported.

The output cuts reflect a steady decline in exploitable reserves at Daqing, which has been in production for more than 40 years.

They could force China to import more oil to fuel its runaway economic boom.

"The problems coming from the reduction of oil from Daqing could be that China will need to import more crude oil from overseas, " Li Xiao Ming, of the Beijing-based China Oil, Gas and Petroleum newsletter, told the BBC's World Business Report.

"It is not very safe for China to rely too much on imported crude."

Industrial giant

The oilfield currently accounts for close to half of China's oil supply, while imports make up about 30%, he added.

Daqing began production in 1960, when a row between Communist China and the leadership of the Soviet Union led Moscow to withdraw much of its economic and technical support.

At the time, Daqing was hailed as a model of Chinese industrial self-reliance.

China is hoping to prolong the oilfield's economic life through innovative extraction techniques.

It is also exploring other sites in the hope of discovering fresh untapped oil reserves.

However, according to Mr Li, there is little prospect that any new reserves will be big enough to plug the gap left by Daqing.

"The possibility to find large oilfields like Daqing is very, very slim," he said.


http://news.bbc.co.uk/1/hi/business/3564257.stm