State-owned China National Offshore Oil Corp. (CNOOC) is doubling down on its focus on domestic production and exploration in 2019, and plans to ramp up spending to a five-year high.
China’s oil consumption increased 10 percent in 2018, with burgeoning petrochemicals spurring demand. Yet domestic production has been unable meet demand, with oil imports rising 30 percent the same year.
In August, President Xi Jinping called on China’s three state-owned producers to prioritize boosting domestic oil production, with existing domestic fields starting to run dry in recent years.
In response, at its yearly strategy conference CNOOC announced the company will boost its annual budget to between 70 and 80 billion yuan (USD $10.3 billion to USD $11.8 billion), up from 63 billion yuan last year. The extra funds will primarily be used to increase output on domestic production and exploration, which will take up 62 percent of the budget in 2019, compared to 51 percent the previous year.
CNOOC is also turning to international partners to assist with domestic projects. In December, CNOOC announced it had signed exploration agreements with nine major international players to search for oil in the Pearl River Mouth basin, in the south of Guangdong province. The company also started work on an offshore wind project in Jiangsu province earlier this month.