Introduction of China Oil Industry

Before 1949, the Chinese oil market was monopolized by American Mobil, Texaco and British Asia companies. In 1948, the total output of crude oil was only 89,000 tons.

On September 25, 1949, the People's Liberation Army formally took over control of the Yumen Oil Field in Gansu Province.

In February 1956, the newly-established Ministry of Oil Industry held the first conference on petroleum prospecting, which demanded that power and labor be concentrated on petroleum prospecting in large basins. Soon later, a number of oil fields were respectively found at Karamay in the Xinjiang Uygur Autonomous Region and Lenghu in Qinghai Province. This marked the beginning of the new China's oil industry. It was historical in 1956 that China's output of crude oil broke a record to come to 1 million tons.

In 1958, the Ministry of Oil Industry ordered that three petroleum prospecting bureaus be established in Songliao, North China and East China regions. Priority was given to prospecting in the Songliao Basin, which was believed to be a prelude that the development of China's oil industry would move eastward.

In 1959, an enterprise star was rising in China's oil sector, which was the famous Daqing Oil Field. A production campaign was launched in Daqing in the early 1960s, which was an important turning point in the history of development of the oil industry.

By 1965, self-sufficiency of oil products was eventually realized in China.

Thanks to large-scale prospecting in the Bohai Sea, some new oil fields with considerable reserves were found one after another, including the Shengli, Dagang and Liaohe oil fields. These new fields enabled the output of China's crude oil broke the record of 100 million tons in 1978, thus joining other countries on the list of major oil producers in the world.

Since the new policy of reform and opening up was adopted in China in the late 1970s, the third development stage of oil and natural gas prospecting has begun. This cross-country prospecting has been conducted in the Tarim Basin, the Junggar Basin and the Turpan-Hami Basin in the west, the continental shelf in the Huanghai Sea and the East China Sea in the east, and the offshore ares in the South China Sea.

During the period from 1979 to 1996, the proven recoverable reserves of China's oil was 1.27 times that thirty years ago and natural gas 5.5 times. In comparison with that of thirty years ago, the annual output of crude oil increased by 51.5 percent and natural gas 46.5 percent. The annual output of crude oil in 1996 reached 157 million tons (coming to 161 million tons by 1998) and that of natural gas 20.1 billion cubic meters. By that year, twenty bases for oil and gas prospecting and development had been established, and 20-odd large-scale petrochemical industrial enterprises founded with the production capacity of crude oil amounting to 210 million tons per year. As a result, the proportion of oil and gas production in the whole energy sector rose to 19.1 percent from less than 1 percent in 1949.

According to development plans of the oil industry, by 2000 a sound cycle of the resource and production in the sector will be realized so as to maintain a stable growth of oil and gas production. Institutional reform of the existing oil companies and enterprises will be accomplished, making them applicable to the socialist market economy. The income from sales of oil products will double that of 1995 to reach 250 billion yuan or 300 billion yuan if possible. The productivity of the sector's labor force should also double that of 1995 to reach the target of 200 tons or more in per capita production of oil and gas.


Status Quo of China's Oil and Gas Resources


Oil

Total Reserves：94 billion tons

The Final Recoverable：14 billion tons

The Proven Reserves：5.28 billion tons

The Proven Rate：37.5%

The Accumulated Recoverable Total：3.03 billion tons

The Total Be Still Used：2.25 billion tons

Annual Output(1997)：160.74 million tons

Natural Gas

Total Reserves：3.8 billion cubic m

The Final Recoverable：1.05 billion cubic m

The Proven Reserves：95 million cubic m

The Proven Rate：9%

The Accumulated Recoverable Total：22.8 million cubic m

The Total Be Still Used：72.2 million cubic m

Annual Output(1997)：2.27 million cubic m