China to up oil output 1.2% to 192 mln tons in '09

China aims to produce 192 million tonnes of crude oil and 86 billion cubic metres of natural gas in 2009, up 1.2 percent and 13 percent, respectively from last year, an industry newspaper said on Monday.

The China Petroleum Daily, run by state oil heavyweight CNPC, the parent of PetroChina, said that in addition to the 2009 crude production goal, equivalent to 3.84 million barrels per day, Beijing had set 2010 and 2011 targets of 196 million tonnes and 198 million tonnes, respectively.

For natural gas, the output goals for 2010 and 2011 are 105 billion and 120 billion cubic metres, the paper said, citing the conclusions of China's national energy work conference, which took place earlier this month.

China also plans to finish its second phase of state oil reserve building in the next three years, to bring its total state oil reserve capacity to 44.6 million cubic metres (281 million barrels), it added.

Since officials have revealed the second phase alone would have a storage capacity of around 26.8 million cubic metres (169 million barrels), the new figure implies the first phase of four reserve bases, which went into operation last year, can hold about 112 million barrels of oil.

Previous state media reports had put the first phase's capacity at about 100 million barrels.

The paper also said the government was considering using part of its foreign exchange reserves to set up a fund for offshore energy exploration.

"In the next three years, the state will encourage domestic firms to do overseas development and mergers by offering loan interest subsidies, favourable loans as well as increasing government capital injections," it added.