Production from Xinjiang to Rival Daqing Production by 2010

Oil production from the remote western region of Xinjiang could reach and overtake the volume from Daqing in the northeastern province of Heilongjiang by 2010, according to predictions from within the industry. With traditional oil fields now in the depletion stage, China has sought to develop the previously unexplored resources of western China in recent years, aiming to solve the energy worries of the country's coastal regions and to redress the growing economic divide between east and west.

Production of crude oil in Xinjiang reached 20.4 million tons in 2002, and that is predicted to rise to 21.5 million tons this year. By 2005, the figure is expected to reach the production level of Shengli, China's second-largest oil field, and will exceed Daqing Oil Field's production volume by 2010 to become China's biggest oil producing region.

The autonomous region's government have already put forward Karamay, Dushanzi, Urumqi and Korla as the four oil refining centers of Xinjiang. According to statistics, there are currently 20 substandard small oil refineries around the Tarim Basin, one of the major sources of oil in Xinjiang, and all have been ordered to close. Efforts are currently being made to "rectify" the market and keep control over the pace of development.

Local conditions remain a hurdle for future development, with one company involved in the discussion complaining about the difficulties in connecting the gas pipeline network in the capital, Urumqi, with surrounding areas. The main reason why the exploitation of resources in Xinjiang lags behind other areas is the treacherous geological and geographical conditions.