CHINA National Petroleum Corp. (CNPC) aims to let more foreign companies develop domestic oil fields as it grapples with stagnant production, building on the success of major onshore gas deals.

CNPC, parent of PetroChina Co., wants foreign firms to bridge the gap in its knowledge of enhanced oil recovery techniques, especially the injection of carbon dioxide into reservoirs to boost well pressure, a senior executive said yesterday.

China’s rising oil needs are also pushing CNPC to open more frontier areas such as the Tarim Basin in Xinjiang, where the terrain is harsh, and give foreign companies access to leases containing unconventional reserves such as oil shale and heavy oil.

CNPC’s strategy is being formulated after production-sharing contracts with Total SA and Royal Dutch Shell PLC brought higher natural gas output at blocks in the Ordos Basin. Last Tuesday, CNPC signed a 30-year contract with Chevron Corp. to share output from a high-sulfur gas block in southwestern China’s Sichuan Province.

“We are thinking of oil after the gas deals...Our priority (for foreign partnerships) is to raise local oil recovery rates,” Yan Cunzhang, general manager of the foreign cooperation unit under CNPC, said.

China’s crude oil production growth is failing to keep pace with rising domestic consumption. The International Energy Agency (IEA) expects output to peak at 3.9 million barrels per day in 2012, even though this year’s Nanpu Jidong oil field discovery is likely to come onstream at that time.

The IEA says all of China’s 11 biggest oil fields are past their production peak. The 11 fields, from 492 in production nationally, contribute nearly half of China’s total domestic output.

Stagnating production is the engine of China’s oil import dependency, which will likely break through the 50 percent threshold soon.

State oil companies have responded by acquiring fields overseas and bringing equity oil back home, although experts aren’t sure this is an effective strategy.

CNPC had a set a goal for its crude oil output in China and overseas next year of 108.65 million metric tons, equivalent to 2.18 million barrels per day, up 1 percent year on year, an executive said earlier last week.

Foreign companies have been pushing for a chance to work toward boosting oil recovery at China’s aging oil fields such as the flagship Daqing field in northeastern Heilongjiang Province, where output is declining at a rate of 3-5 percent a year.

(SD-Agencies)