China's Liuhua Oilfield Achieves Full Secondary Production Capacity

China’s Liuhua Oilfield, located in the South China Sea, has officially reached full secondary production capacity, according to official energy sector reports. This phase involves enhanced recovery techniques such as water or gas injection to maximize hydrocarbon extraction from mature reservoirs. The facility is now operating at its designed peak output, contributing approximately 80,000 barrels of oil equivalent per day (boe/d) from secondary recovery methods. This development underscores China’s ongoing investment in offshore oil infrastructure to meet rising domestic energy demand and reduce import dependency. The Liuhua field, developed by CNOOC Limited, has undergone a multi-stage expansion since initial production began in 2006. With the full activation of secondary recovery systems, the field is expected to extend its productive life by at least 15 years, enhancing long-term energy security for the nation. The incremental output from Liuhua is projected to contribute up to 0.5% to China’s total crude oil production, which stood at around 4.8 million barrels per day in 2024. This modest but stable supply increase could temper short-term volatility in global crude markets, particularly in Brent and West Texas Intermediate benchmarks. Traders monitoring CL=F and OIL futures may factor in the new production capacity when assessing supply balance dynamics. Energy ETFs tied to oil and gas, such as XLE and UCO, could experience minor upward pressure due to improved supply-side fundamentals in Asia. The development also signals continued confidence in offshore oil projects despite global shifts toward renewable energy, indicating that fossil fuels remain central to China’s near-term energy strategy.