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China crude output in August drops nearly 10 per cent

China crude

China crude output has dropped.  Sinopec says it expects its crude output to drop 16 per cent in the second half of 2016. 2b1stConsulting.com photo.

China crude output at more than 6-year low

BEIJING, Sept 13 (Reuters) – China’s crude oil output fell almost 10 percent in August from a year ago to the lowest in more than six years, data from the statistics bureau showed, as low prices continue to plague major producers.

China pumped 16.45 million tonnes (3.87 million barrels per day) of crude in August, the least since December 2009 on a daily basis and the second month of sharp decline.

China’s shrinking crude output reflects the concerns of the nation’s top energy groups, who are struggling to keep their wells open with benchmark Brent prices still down nearly 60 percent from a mid-2014 peak above $115 a barrel.

Sinopec, one of China’s largest energy conglomerates, forecast its crude output will drop 16 percent to 147 million barrels in the second half of this year from 175 million barrels in the same period last year.

At Zhongyuan oilfield in central China, one of Sinopec’s largest crude deposits, the company said it has reduced its workforce to 4000 workers from 10,000.

Sinopec Chairman Wang Yupu told investors in August the company has closed down some aging wells and reduced output to counter the decline in crude oil prices.

“If the crude prices stay between $45-$50, we will open new discovered reserves to compensate for the drop in output,” he said during a half-year earnings presentation.

China’s crude output in the first eight months of 2016 was down 5.7 percent to 134.8 million tonnes (4.03 million b/d).

August crude throughput at Chinese refineries was down 0.7 percent from a year earlier to 44.28 million tonnes (10.43 million b/d).

China’s natural gas production for August fell 2 percent from a year earlier to 10.8 billion cubic meters, the statistics bureau said in a statement.

(Reporting by Meng Meng and Beijing Monitoring Desk; Editing by Tom Hogue)

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