[Industry Alert] Despite Oil Finds, China will Rely Heavily on Imports

Between 3 and 3.5 billion tons will be added to China's proven oil reserves by 2010, and by 2015 China will be producing 200 million tons of oil annually while importing an equivalent amount, according to the 2008-2015 Program on National Mineral Resources issued by the Ministry of Land and Resources on January 7.

Ju Jianhua, a vice director of the Ministry of Land and Resources told a news conference yesterday that China will have discovered about six hundred-million-ton oil fields and six to eight hundred-billion-ton gas fields by 2010, on the evidence of current exploration.

It is estimated that between 2008 and 2020, China will consume 6 billion tons in total, and by 2020 annual demand will reach 500 million tons.

Currently, China produces about 200 million tons of oil, meaning half of the 400 million tons it consumes must be imported.

Ju warned that if China's oil exploration technology did not improve and economic growth remained unchanged, China would have to import 60 percent of its oil by 2015.

The program says that China should prioritize the construction of national strategic oil reserves to cope with emergency supply issues and oil price volatility.

Ju said China plans to speed up the construction of mineral reserves in eastern China, using underground salt caves as oil storage dumps, and will also construct a large underground oil storage facility on the southeastern coast.