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China's Big Oil Aims Spending Boom at Old Wells to Heed Call

  • Nation’s three largest producers increase capex to 2014 high
  • Investors to ask if spending will generate reasonable returns
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Photographer: Lucas Schifres/Bloomberg

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China’s oil giants aim to spend the most in five years in pursuit of higher energy output. But unlike global rivals investing in top-tier assets, the state-owned producers are trying to boost supply from fields that are either old and high-cost or new and challenging.

China’s big three -- PetroChina Co., Sinopec Corp. and Cnooc Ltd. -- are raising combined capital expenditure to about 517 billion yuan ($77 billion), up 18 percent from last year. That’s almost back to levels seen before oil’s collapse in 2014, after President Xi Jinping ordered them to focus on raising domestic output to bolster national energy security.