China’s Risky Move To Boost Domestic Oil Production

China's unprecedented economic development since Deng Xiaoping's "Open Door Policy", has transformed the Asian country into the second largest economy of the world. The booming economy has had the undesired side-effect of increasing Beijing's dependence on foreign oil imports. Twenty-five years ago, China produced approximately 4 million barrels per day (mb/d), which was enough to satisfy the Asian country's domestic demand for petroleum products. In April, on average, 10.64 mb/d were imported, which is a new record. In 2018, the ratio of foreign oil dependency reached 70 percent and this number is expected to grow. It is a reason for concern, as oil is a crucial product for maintaining stability and security. Beijing is aware of its relative weakness because most of the imported oil reaches mainland China through shipping lanes, which are controlled by the U.S. Navy. The relative weakness of the Chinese navy increases the risks and exemplifies the security threat in case of a blockade. Therefore, Beijing has been pushing domestic energy companies to increase production from local oil fields...MORE