Dec. 25 (Bloomberg) -- China Petrochemical Corp., the nation's second-biggest oil company, said it may produce 1.9 percent more crude oil and 11 percent more gas this year as energy demand rises.

The company may pump 40 million tons of crude oil and 7 billion cubic meters of natural gas from domestic fields this year, said Sinopec Group, as China Petrochemical is known, in a statement on its Web site today. The company produced 39.27 million tons of crude oil and 6.3 billion cubic meters of gas last year, according to data from its Web site.

Chinese oil companies are increasing investments in oil and gas exploration to meet demands by the world's fastest-growing major economy, which expanded 10.7 percent in the first three quarters of this year.

``The company will step up exploration efforts in 2007 to increase our self dependence in oil production,'' said Wang Tianpu, president of Sinopec Group's overseas-listed unit Sinopec, in its statement.

Sinopec Group's recoverable oil will rise by 45 million tons while its gas reserves will increase by 73.9 billion cubic meters in its domestic fields in 2006, as the Beijing-based oil producer steps up exploration, Sinopec Group said today.

PetroChina Co., the listed unit of Sinopec Group's bigger rival, is aiming to increase 2007 gas production by 25 percent, according to Dec. 22 figures published by China National Petroleum Corp., the parent company.

PetroChina wants to expand gas output by 10 billion cubic meters (353 billion cubic feet) next year, China National said. PetroChina aims to produce 1.41 trillion cubic feet of gas this year, the company said in March.

Overseas Output

Sinopec Group's overseas oil production may more than double to 4.5 million tons in 2006, the company said today.

The company plans to expand output from Russia's Udmurtneft project to meet rising demand, company President Chen Tonghai said on Nov. 10.

The company agreed to buy OAO Udmurtneft, an oil-producing unit of a venture controlled by BP Plc for $3.5 billion in June. Udmurtneft holds 551 million barrels of proved oil reserves, according to a June statement from TNK-BP.

China's oil demand, which has almost doubled in a decade, will increase 6.2 percent this year and 5.4 percent in 2007, the International Energy Agency forecast in November.

Sinopec Group is the parent of overseas-listed China Petroleum & Chemical Corp., or Sinopec.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net.

Last Updated: December 24, 2006 21:55 EST