China Oil And Gas Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

China Oil And Gas Market Trends and Insights

Energy-security Push & Import-Substitution Mandates

Beijing requires crude oil output to remain above 200 million tons per year, thereby reducing reliance on imports, which currently account for 73% of demand.^{[1]Ministry of Industry and Information Technology, “Domestic Crude Production Targets,” miit.gov.cn} CNPC and Sinopec secure low-cost policy-bank financing for infill drilling, while CNOOC accelerates offshore exploration to diversify reserves. A larger strategic petroleum reserve insulates domestic supply, and mandated local-content rules spur procurement of Chinese-made rigs, pumps, and subsea umbilicals. Petrochemical producers increase off-take contracts for domestic naphtha and ethane, locking in baseline consumption even as gasoline sales flatten. Together, these policies underpin a security premium that cushions the Chinese oil and gas market against price shocks.

Petrochemical Feedstock Demand from Dual-Circulation Strategy

China’s economic planners channel investment into integrated refinery-chemical complexes that convert more barrels of crude oil into aromatics and olefins, thereby boosting hydrocarbon demand beyond transport fuels. CNOOC’s Daxie Island revamp lifts crude-run capacity 50% and doubles chemical yield, mirroring upgrades in Guangdong and Jiangsu.^{[2]China National Offshore Oil Corporation, “South China Sea Block 23/21 Discovery,” cnooc.com.cn} Domestic ethylene output climbed 12% in 2024, absorbing extra condensate and LPG flows from inland basins. Petrochemical feedstock contracts typically have five-year tenures, providing producers with predictable cash flow and anchoring the Chinese oil and gas market during shifts in the energy transition.

Shale-Gas Commercialisation in Sichuan & Chongqing

Annual shale-gas output tops 70 billion m³ after operators drilled ultra-deep horizontals at more than 8,000 m TVD. Multi-stage fracturing and high-strength proppants achieve 18% higher initial flow rates compared to 2023. Recycled flowback water addresses scarcity constraints, and pad-drilling layouts minimize land disturbance in populated valleys. With breakeven prices now under USD 3.5 per MMBtu, Sichuan shale becomes margin-positive at prevailing spot prices, encouraging acreage bids from private independents and foreign service firms. As power generators switch from coal to gas for winter peaking, local pipeline expansions lift offtake capacity, supporting continuous development.

National Pipeline Network (PipeChina) Capacity Expansion

PipeChina operates 98,000 km of trunk lines, in addition to seven LNG terminals that unload 30 million tonnes per annum (tpa), thereby separating transport from production and facilitating third-party access. New west-to-east arteries move Xinjiang gas to Shanghai in under four days, trimming citygate prices by 8%. The network interconnects with the Power of Siberia pipeline and coastal LNG regasification plants, providing dispatchers with the optionality to balance domestic and imported volumes. Stable transport tariffs allow provincial utilities to sign firm supply contracts, removing a historical constraint on gas demand growth inside the Chinese oil and gas market.

Windfall-Profit Tax on Upstream Majors

A tiered levy skims exceptional earnings during high-price cycles, trimming reinvestment budgets at CNPC, Sinopec, and CNOOC. Management prioritises core blocks with quick payback and delays marginal frontier wells. The tax coincides with rising CCS outlays, intensifying cash-flow pressure, and slightly tempering expansion inside the Chinese oil and gas market.

Stringent Methane-Emission Regulations (2025 Action Plan)

The 2025 action plan requires continuous monitoring and quarterly leak repairs, which raises compliance costs for shale and coal-bed methane producers.^{[3]National Development and Reform Commission, “Methane Emission Control Action Plan,” ndrc.gov.cn} Operators retrofit pneumatic valves and install vapour-recovery units, lifting unit OPEX by 3% but cutting emissions intensity by 40%. Equipment makers of optical gas-imaging cameras are seeing bumper orders; however, temporary shutdowns for retrofits are shaving the near-term outlook for output.

Segment Analysis

By Sector: Upstream Dominance Drives Market Structure

Upstream activities accounted for 71.28% of China's oil and gas market share in 2024, underpinned by aggressive state-funded exploration in the Bohai, South China Sea, and Ordos regions. Meanwhile, the downstream sector is projected to drive market growth with a CAGR of 5.58% through 2030. Integrated majors utilize AI-assisted seismic inversion, reducing exploration cycle times by 20% and reinforcing their upstream preeminence.

Upstream spend focuses on reservoir management tools that enhance recovery factors in mature blocks. Carbon-capture pilots in producing wells store CO₂ in depleted formations, allowing incremental barrels under stricter emission norms. Although downstream gasoline cracks narrow with EV adoption, aromatics margins remain firm, propelling refinery utilization and sustaining chemical demand that ripples upstream.

Note: Segment shares of all individual segments available upon report purchase

By Location: Onshore Operations Maintain Strategic Advantage

Onshore wells accounted for 67.93% of China's oil and gas market size in 2024, led by the Ordos, Tarim, and Sichuan basins.^{[4]National Energy Administration, “Regional Production Statistics,” nea.gov.cn} Offshore registers a 7.50% CAGR to 2030 as output increases with large discoveries in the Lingshui and Liuhua blocks, but remains more expensive on a barrel-equivalent basis.

Shunbei set a depth record at 8,000 m, proving onshore ultra-deep prospects viable at moderate oil prices. Hydro-fracturing water recycling halves freshwater draw in arid Tarim, keeping regulators supportive. Offshore platforms now utilize subsea cables to tap renewable power from Guangdong, reducing lifecycle emissions by 15%; however, high capital expenditure limits broader replication.

By Service: Construction Dominance Shifts Toward Decommissioning Growth

Construction services captured 66.50% of the Chinese oil and gas market share in 2024 as PipeChina laid new transmission lines and CNOOC assembled deep-water topsides. Massive pipeline corridors linking Xinjiang fields to the Yangtze River deltas required thousands of kilometres of trenching and compressor-station builds, while offshore jacket fabrication peaked to support South China Sea developments.

Decommissioning services, however, are expected to log the fastest 8.10% CAGR through 2030, as the first-generation offshore platforms installed in the late 1980s approach the end of their life. Regulatory guidelines now compel full jacket removal and seabed clearance, creating a market for heavy-lift vessels, well-plugging gear, and subsea debris mapping. Early contracts in the Bohai and Pearl River Mouth basins indicate a growing demand for specialist contractors with global removal experience. Meanwhile, maintenance and turnaround work remains steady as AI and IoT sensors enable predictive strategies that reduce labour needs amid a shrinking skilled-worker pool. Digital project-management suites streamline cost estimating and permit tracking, raising efficiency throughout the service stack.

The service-mix evolution signals a maturing China oil and gas market that balances greenfield construction in frontier zones with asset renewal and environmental compliance projects in legacy areas. Construction spending remains anchored in Xinjiang pipelines and new LNG tanks; however, a larger slice of future budgets is shifting toward lifecycle retirement solutions, reflecting global best practices and stricter domestic standards.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

China’s west produces and the east consumes, creating bulk east-bound flows that define logistics in the China oil and gas market. Xinjiang and Sichuan together delivered more than 160 million tons of oil equivalent in 2024, whereas coastal provinces house 65% of the refining capacity and most petrochemical crackers. PipeChina’s new arteries cut transit time and balance inland surpluses with eastern deficits.

Ordos basin remains the single largest producing hub with 97.5 million tons, aided by steam flooding in tight-sand reservoirs. Sichuan emerges as the unconventional gas core, aided by nearby proppant plants that reduce material-haul costs. Bohai Bay hosts mature shallow-water fields that are now entering secondary recovery, while deep-water plays in the South China Sea, such as Lingshui, add reserves rich in condensate.

Northern Heilongjiang and Inner Mongolia produce conventional barrels that feed Liaoning’s refineries, whereas Guangdong leads in LPG imports and cracking. Seasonal LNG demand spikes draw cargoes into Zhoushan and Shenzhen, smoothing winter supply. Cross-border pipelines from Kazakhstan and Russia provide central dispatchers with flexibility, while the proposed Myanmar corridor gasifies Yunnan and Guangxi, thereby closing regional gaps.

Participation in Belt and Road projects secures equity barrels abroad that backstop domestic shortages. CNPC’s stake in Power of Siberia 2 will deliver 50 billion cubic meters annually to the Chinese oil and gas market starting in 2030. Similar deals in Turkmenistan, Iraq, and Mozambique ensure optionality, offering geopolitical hedges and supply diversification.