China's largest oilfield, the Daqing Oilfield, in northeast China's Heilongjiang province is expected to cut 1.5 million tons of output next year to stay in line with the new production schedule of the China National Petroleum Corporation (CNPC).
The Daqing Oilfield accounts for nearly a quarter of all the oil extracted from the inland oilfields in China.
The output from this oilfield is set to be reduced to 32 million tons by 2020, from its current level of operations, where 40 million tons of oil is produced each year. This requires an average reduction of 1.3 million tons annually, Xinhua news agency reports.
Daqing Oilfield has been hampered by the shortage of back-up resources and increasing costs after years of intense exploitation. Along with the sharp fall in international oil price, it is difficult to maintain a high and stable yield for crude oil, the report says.
When the plan is implemented, it will lead to the sustainable development of the oilfield and create more opportunities for innovation and to utilize new technologies.
The production cuts can put a continued strain on the economic growth of Heilongjiang province during the 13th Five Year Plan that will be introduced in 2015.
As the energy industry accounts for more than half of the large scale industries Heilongjiang province, the drop in oil production and its price will slash the Province's GDP figures by a whopping 20 billion Yuan. Its fiscal revenues are also expected to go down by almost 6 billion Yuan.
Daqing Oilfield has produced more than 2.1 billion tons of crude oil since 1960.
