China’s crude oil output will rise by 1-2 per cent this year, Yu Baocai, vice president of state-owned China National Petroleum Corp (CNPC), said.

The forecast is slightly below a previous estimate of 2 per cent given in a CNPC research report but above the 0.5 per cent growth target issued by China’s planning ministry, the National Development and Reform Commission, in its 2010 economic plan.

Last year, oil output fell 0.4 per cent to 189.49 million tonnes, or 3.79 million barrels per day, according to data from the National Bureau of Statistics.

Gordon Kwan, head of regional energy research at Mirae Asset Securities, told Reuters he was expecting about 1.0 per cent growth in production this year.

“I believe the struggle with meaningful oil production growth has to do with the difficulties of finding sizable new discoveries to offset the aging fields in Daqing and Liaohe, despite higher oil exploration spending,” he said.
“The era of easy oil is over.”

China already relies on imported crude oil for more than half its needs and it is expected to become increasingly import-dependent in the next decade. Its annual oil consumption is second only to the US.