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    China’s spending on oil & gas production to surge till 2025


    September 24, 2021 - Trend News Agency

     

      BAKU, Azerbaijan, Sept.24

      By Leman Zeynalova – Trend:

      A Rystad Energy report projects a surge in China’s spending on oil and gas production till 2025, which will be accompanied by a drilling spree totaling 118,000 wells that will create significant opportunities for suppliers, Trend reports.

      China’s national oil companies (NOCs) are expected to splurge more than $120 billion on drilling and well services in the five-year period of 2021-2025, seeking to meet the rising oil and gas demand. At the same time, the country aims to supply more of its oil demand from domestic sources, after the share of imported crude oil has risen steadily from 2014 to a high of almost 75 percent last year.

      To be exact, CNPC, CNOOC and Sinopec together are expected to spend about $123 billion on drilling and well services in the coming five-year period, up from a total $96 billion between 2016 and 2020.

      As a result of China’s oil and gas demand growth, drilling activity in the country is expected to remain intense in years to come, with the cumulative number of development and exploration wells drilled between 2021 and 2025 expected to reach 118,000. Development wells will account for 88% of the total and exploration wells will make up the remaining 12%.

      “Despite a strong policy push to electrify transport, China is still expected to use oil products to fuel its hundreds of millions of cars, buses and trucks for the next five years at least. Although the country’s electric vehicle market is projected to achieve a 20 percent market share by 2025, internal combustion engine vehicles are expected to account for most of China’s transport needs and to provide a backbone for oil demand through 2025,” says Peng Li, energy research analyst at Rystad Energy.

      While the transition to a low-carbon economy is a major priority for China, balancing this with the nation’s transitional oil and gas needs is still an important consideration. This is outlined in China’s 14th five-year plan for 2021-2025, which emphasizes the importance of identifying new hydrocarbon reserves and increasing oil and gas production, alongside increasing the share of non-fossil fuels to 20 percent by 2025.

      ---

      Follow the author on Twitter: @Lyaman_Zeyn

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