China launches new oil and gas exploration drive targeting 200 million tons

China is doubling down on domestic oil and gas exploration after a seven-year campaign stabilized crude output above 200 million tons.

China kicked off a new round of strategic oil and gas exploration in 2026, targeting annual crude output above 200 million tons and sustained natural gas growth as the nation seeks to curb import dependence.

"The seven-year action plan successfully reversed the decline in domestic production, and the new phase will build on that momentum," said Lu Ruquan, head of CNPC's Economics & Technology Research Institute.

The 2019-2025 campaign raised crude output to more than 200 million tons annually. China's external oil procurement ratio fell 0.5 percentage point to 71.9% in 2024, while crude imports dropped 1.9% to 553.4 million tons, customs data show.

The push comes as China simultaneously pursues a record renewable buildout — targeting 370 GW of new wind and solar capacity in northern regions under the 15th Five-Year Plan — but the parallel oil and gas drive signals Beijing views fossil fuel self-sufficiency as equally critical to energy security as global markets remain volatile.

The NEA's "China Oil and Gas Exploration and Development Report (2026)" confirmed the seven-year plan's completion and outlined the successor strategy. The new phase will require sustained capital expenditure increases across the upstream sector, benefiting state-owned giants PetroChina, Sinopec and CNOOC, as well as oilfield services companies.

Drilling Deeper Into Frontier Basins

China has already demonstrated its technical capacity for ultra-deep exploration. CNPC's Shenditake 1 well in the Tarim Basin reached 10,910 meters in February 2025, making it Asia's deepest vertical well and the second-deepest globally. The Tarim Basin, located between the Tianshan and Kunlun mountains, is among the world's most geologically challenging drilling environments, according to Hao Fang, an academician at the Chinese Academy of Sciences.

In the Ordos Basin, the NEA separately released an action plan targeting over 600 billion cubic meters of proven coalbed methane geological reserves by 2030, with annual production reaching 18 billion cubic meters — more than 16 billion from deep-layer sources. The basin's extensive coal-bearing strata and high gas content make it a priority frontier.

Energy Security in a Two-Track Strategy

The exploration push runs parallel to China's record renewable energy expansion. Under the 15th Five-Year Plan released in July 2026, wind and solar combined will exceed 2.8 billion kilowatts of installed capacity by 2030, accounting for over 50% of total power capacity. Total renewable energy consumption is targeted at 1.8 billion tonnes of standard coal equivalent, fully offsetting fossil fuel growth.

Yet the oil and gas strategy acknowledges that renewables alone cannot meet China's peak-load and industrial feedstock needs. The NEA's dual-track approach — maximizing domestic hydrocarbon output while building the world's largest clean power fleet — reflects a pragmatic energy security calculus shared by few other major economies.

The last time China launched a comparable upstream campaign — the 2019 Seven-Year Action Plan — domestic crude output reversed a multi-year decline, rising from about 191 million tons in 2018 to consistently above 200 million tons. The new plan aims to lock in those gains and extend them into natural gas, where import dependence has been rising faster. Third-party estimates peg total investment across China's domestic oil and gas supply chain during the 15th Five-Year period at well over 1 trillion yuan, spanning exploration drilling, pipeline infrastructure and enhanced recovery technologies.

This article is for informational purposes only and does not constitute investment advice.