China's Petroleum Industry Development

China’s petroleum industry is currently exhibiting a multi-dimensional development trend, with the following key dynamics:

I. Exploration, Development, and Technological Breakthroughs

Significant achievements in increasing reserves and boosting production. ‌

In 2024, China’s domestic oil and gas equivalent production exceeded 400 million tons, with crude oil reaching 213 million tons and natural gas at 248.8 billion cubic meters—marking continuous growth of over 10 million tons for eight consecutive years. The development of deep-layer, deep-sea, and unconventional resources has become a key focus. Shale oil production reached 7.8 million tons (in three national-level demonstration zones), while the Ordos deep coalbed methane output totaled 2.5 billion cubic meters. The “Deep Sea No. 1” ultra-deepwater gas field in the South China Sea signifies a breakthrough in independently developed technologies. 20 Thanks to refined water injection and the application of new technologies, production from old wells in the southern oilfield has remained stable and is steadily increasing, while new wells are being brought online rapidly. 

Core technology iteration and upgrade ‌

Smart technology AI algorithms optimize reservoir prediction (accuracy improved to 78%), and digital twin technology reduces drilling accident rates by 63%. 9；

Oil displacement technology Nano-intelligent oil displacement and industrial-scale application of CCUS (with cumulative carbon injection exceeding 15 million tons and oil production increase exceeding 3 million tons in the Xinjiang Oilfield). 20；

Ultra-deep well technology The drilling of the 10,000-meter-deep well “Deep Earth Well Tako 1” has achieved a breakthrough, and China’s domestically developed 12,000-meter drilling rig has become fully independent^[20].

II. Accelerating the Green and Low-Carbon Transition

New energy deployment ‌

Wind and solar power generation reached 4.8 billion kilowatt-hours (doubling year-on-year in 2024), and wind power projects at the Jilin Oilfield and photovoltaic projects at the Daqing and Xinjiang Oilfields are being fully advanced. 6；
Geothermal and hydrogen energy demonstration projects have been launched, and progress has been made in the integrated application of thermal energy storage and concentrated solar power at the North China Oilfield.

Energy Efficiency Improvement and Emission Reduction ‌

The thermal efficiency of refining and petrochemical units has been improved by 0.25 percentage points, and CCUS technologies are being integrated into ethylene projects such as those at Jilin Petrochemical. 514；

Methane emission controls are being stepped up, and a special action plan has been formulated. 6

III. Refining and Upgrading the Industrial Chain

‌ High-end refining and chemical projects are being concentratedly constructed. ‌

The five major ethylene projects of CNPC (including Jilin Petrochemical and Guangxi Petrochemical, among others) have a total investment exceeding 120 billion yuan, driving the extension of the “refining, chemical processing, bio-based materials, and advanced materials” industrial chain. New material production reached 800,000 tons (a year-on-year increase of 37.5% as of Q1 2025). 714

Sales Network Optimization ‌

The integrated energy stations—combining oil, gas, hydrogen, and electricity—are accelerating their deployment. As a result, China’s domestic refined oil sales market share has increased by 1.2 percentage points, while non-oil businesses and the development of proprietary products have strengthened the competitive edge at the retail end. 

IV. Policy and Market Changes

Access for private capital ‌

The National Energy Administration’s “15 Measures for the Private Economy” allows private enterprises to bid for shale gas and coalbed methane exploration and development rights, while opening up a 5% quota for conventional oil and gas blocks, thereby promoting diversification of market competition. 

Price mechanism adjustment ‌

In June 2025, the ex-factory price of refined oil products will be raised by 260 yuan per ton, reflecting the synergy between market-oriented pricing and ensuring supply stability. 13。

V. Deepening the Globalization Strategy

Technology Export and Brand Building ‌

The UAE’s CO2-enhanced oil recovery project, Singapore’s ultra-clean fuel refinery (exporting 4 million tons per year), and Australia’s Arrow Energy carbon management model (which has earned 38,000 tons of carbon credits) have become international benchmarks.

Overseas resource integration ‌

China National Petroleum Corporation is expanding LNG receiving stations and pipeline infrastructure in regions such as Southeast Asia and the Middle East, with a local employee localization rate reaching 92%. 

VI. Challenges and Trends

Structural stress Oil prices are experiencing volatile downward trends (with the average Brent crude oil price in Q1 2025 at $74.98 per barrel), refining and cracking margins are narrowing, and high-end chemical products are becoming key drivers of profit growth. 

Technical barriers The coverage of domestically produced and intelligent drilling systems for deep-sea equipment needs to be further enhanced to meet policy objectives. 9；

Regional Collaboration The revenue share of the eastern coastal regions has dropped to 50%, while the central and western regions, leveraging their resource endowments, have seen their share rise to 35%, thus forming a “strong east, advancing west” pattern. 

In summary, China’s petroleum industry is adopting a “traditional + emerging” dual-track development model through technological innovation, green transformation, and global expansion, thereby supporting both energy security and high-quality development goals.