January 8, 2009 / 5:42 AM / 10 years ago

UPDATE 2-China sees imports at 60 pct of oil use by 2020

(Adds quotes and context)

By Eadie Chen

BEIJING, Jan 8 (Reuters) - China will become increasingly reliant on imports for its growing oil demand as domestic production sees no big breakthrough in the years ahead, a report by the Ministry of Land and Resources said.

The prospect may fan expectation that the world’s second largest oil-using country will once again stoke up global oil prices.

After a heavier than anticipated impact from the global crisis, China’s economy has suffered an abrupt slowdown. This has choked its once insatiable appetite for oil while comparatively high domestic fuel prices have forced drivers off the road.

The ministry forecast that by 2020 China will consume 500 million tonnes of oil a year (10 million barrels per day), 43 percent more than the 350 million tonnes it used in 2007 — but still less than half current U.S. consumption.

But China’s own oil output is expected to increase by only 5 percent between 2010 and 2015, rising from 190 million tonnes (3.8 million barrels per day) to 200 million tonnes in 2015.

That implies growth will stagnate in 2009 and 2010 after crude oil output estimated at 189 million tonnes in 2008.

So Beijing will have to rely on imports for 60 percent of its oil demand by 2020, up from 50 percent now. China is building up strategic oil reserves but even that will not solve the supply problem.

“We don’t have an adequate ability to build up strategic reserves of resources and would would be in a difficult situation in case of a sudden supply cut or other major emergency. This poses a lot of challenges,” the ministry said.

China’s energy demand has more than doubled during the past decade. It will consume about 41 percent of global coal consumption and 17 percent of global energy supply by 2050, according to a study published in Pacific Focus in November.

“The economic prosperity of China partnered by its rising energy demands will affect global energy sectors, commodity stock exchange market, energy trading strategies and environmental policies,” the report’s co-author Zhang Jian said at the time.

Crude oil CLc1 has lost more than two thirds from its $147 peak hit in July and was trading just below $43 a barrel on Thursday.

The International Energy Agency has said that emerging markets such as China and India could make up for declining oil demand from developed countries and may be a cause of demand growth in 2009.

China is on track to register its first single digit annual economic growth in 2008 after five years of double digit expansion. The world’s fourth-largest economy is expected to grow by less than 8 percent in 2009, a bottom line Beijing has been striving to safeguard.

NEW FIELDS

While oil output barely edges ahead, gas production is expected to balloon to 110 billion cubic metres (bcm) in 2010 and 160 bcm by 2015, double the 79 bcm produced in 2008. Gas produced from coal-bed methane projects will also jump from 4.3 bcm in 2007 to 10 bcm in 2015, the ministry said.

Use of China’s most abundant but dirtiest fuel, coal, will also keep growing, although at a slower rate than in recent years.

Production will hit 2.9 billion tonnes per year by 2010, up 26 percent from 2007, and rise to 3.3 billion tonnes by 2015. Consumption will exceed 3.5 billion tonnes by 2020, the ministry said.

China also plans to ramp up its efforts to find more oil and gas fields to boost its own oil production to help meet demand.

“We will try to make major discoveries of oil and gas in new areas, at new depths and in key offshore zones, which will set a direction for follow-up exploration,” the ministry said.

Reporting by Eadie Chen, Editing by Jacqueline Wong and Jonathan Hopfner eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below