With production from China’s established oilfields gradually reaching a bottleneck, the government is setting out to explore new terrain, notably in the South China Sea, reports Shanghai’s National Business Daily.

The annual output of Daqing in Heilongjiang, China’s largest field, is expected to drop from an estimated 40 million tonnes in 2014 to 32 million tonnes by 2020, according to the state newswire Xinhua. A similar fate awaits other oilfields as reserves deplete and new reservoirs become increasingly difficult to access after years of production.

China’s crude oil output has remained virtually unchanged in recent years, while demand continues to rise. Oil imports have risen to 60 per cent of the country’s oil profile to compensate. Data show that during 2005-2013, China’s annual crude-oil consumption jumped near 200 million tonnes, far outstripping the 30 million tonnes of increased domestic output. In 2013, China’s crude oil consumption reached 488 million tonnes, more than double its output. Almost 55 per cent of that output came from five major oilfields, including Daqing (40 million), Changqing (24 million), Shengli (27.8 million), Liaohe (10 million) and Xinjiang (11.6 million).

To fill the shortfall, the government is stepping up offshore oil exploration, as shown in its action plan for the energy development strategy from 2014-2020. The outline calls for the construction of a big oilfield with annual output of 10 million tonnes in the South China Sea.

The China National Offshore Oil Corporation (CNOOC) has been intensifying oil exploration in the sea are, notably the western region, the main site for natural gas reserves.