China's Oil Needs

There is a useful and timely survey of China's oil needs in Bloomberg today:

For now, China's energy demand far outstrips what it can produce at home. The nation's oil imports surged 35 percent last year to a record 122.7 million metric tons as PetroChina Co., China Petroleum & Chemical Corp. and CNOOC -- China's biggest oil companies -- failed to produce enough domestically to meet demand in an economy that grew 9.5 percent. Imports accounted for about 40 percent of last year's consumption.

CNOOC's Unocal bid would be the largest-ever overseas acquisition by a Chinese company, and follows more than $200 million in Canadian oil-sands acquisitions announced by Chinese companies since April.

While owning more overseas oil reserves enables Chinese companies to meet rising demand at home, such acquisitions don't reduce imports because the oil still has to be shipped into China. The nation's efforts to tap more resources at home won't be enough to close the gap between growth in domestic production -- 2.9 percent last year -- and demand, which surged 15 percent.