In a world where geopolitics and energy security are increasingly intertwined, China's national oil companies have emerged as pivotal actors in securing the nation’s energy future while shaping global energy dynamics. Through bold investments, innovative technologies, and a relentless drive to both secure and diversify their energy sources, China’s ‘Big Three’ NOCs — China National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec), and China National Offshore Oil Corporation (CNOOC) — are proving that the future of energy lies not only in securing existing resources but in transforming how energy is produced, consumed, and integrated into the energy system.

At the heart of China’s energy strategy lies its ambitious, seven-year (2019-2025) domestic oil and gas production campaign launched by the National Energy Administration in response to growing energy security concerns. The results have been promising: since the campaign’s inception China has reversed a domestic production decline and increased output by approximately 480,000 barrels per day. However, the country's dependency on foreign oil remains high, with imports filling more than 70% of Chinese demand.

In the gas sector, China has achieved significant domestic production growth, with an annual increase of more than 10 billion cubic meters since the campaign began. Nevertheless, the nation's foreign gas dependency had risen to 45% as of 2024 and is expected to continue growing, reaching 50% by 2050. The security of China's oil and gas supply remains a pressing concern for policymakers.

China’s Big Three NOCs are at the forefront of the country’s energy agenda. These companies, each with a particular focus, form the backbone of China’s energy security strategy.

China’s Big Three NOCs are at the forefront of the country’s energy agenda. These companies, each with a particular focus, form the backbone of China’s energy security strategy. They are integrated conglomerates with distinct strategic focuses, with CNPC concentrating on land upstream exploration and production, Sinopec on downstream refinery and petrochemicals, and CNOOC on global offshore oil and gas development.

In response to China's high oil and gas import dependency, these NOCs have intensified their domestic exploration and production activities. Annual domestic E&P capital investment has increased by about 20% since the start of the seven-year campaign in 2019, and the Big Three have achieved notable success in driving up domestic production through three key strategies.

Firstly, they have expanded E&P activities to access previously hard-to-reach resources, both onshore and offshore. CNPC's deepest-ever well — in the Tarim Oil Field, with a vertical depth of over 10,000 meters — has paved the way for further ultra-deep resource development in the region. CNOOC's recent discoveries in the South China Sea have also demonstrated the company's capabilities in exploring for and producing oil and gas in ultra-deep waters.

Secondly, the Big Three have focused on developing unconventional resources, including shale and tight oil and gas, coal bed methane, and extra-heavy oil. Their total unconventional production has increased by an average of 7.2% annually during the 7-year campaign and today accounts for approximately 31.5% of their domestic production.

Lastly, the Big Three have successfully utilized advanced enhanced oil recovery (EOR) technologies to arrest production declines in mature assets. CNPC's Daqing Oil Field, one of China's oldest, has been in production for 65 years and production water cut has reached 80-90%. However, CNPC managed to maintain production above 6 million barrels per day for the past decade, thanks to the implementation of advanced EOR solutions.

In addition to domestic E&P efforts, the NOCs recognize the importance of balancing domestic and overseas resources to ensure China's energy security. They have actively participated in global upstream mergers and acquisitions, increasing their asset positions in Latin America and Africa. Overseas production has accounted for more than 30% of their total production over the past decade.

As China transitions towards a greener energy mix, the Big Three view the green transition as an opportunity rather than a challenge. Leveraging the country's global leadership in renewables, they are coupling their traditional oil and gas businesses with new-energy initiatives to achieve a balance between energy supply security and low-carbon development.

CNPC, for instance, is focusing on carbon capture, utilization, and storage (CCUS) as one of its main green transition focuses. The company is also developing its geothermal and hydrogen energy industrial chains. In its downstream retail business, CNPC is promoting the layout of integrated energy stations combining oil, gas, hydrogen, electricity, and non-energy services to achieve energy diversification and sustainable development.

Sinopec, on the other hand, is prioritizing green hydrogen production from renewable power and CO₂ electrochemical technologies. The company has vigorously expanded its electric vehicle charging and LNG refueling networks, with charging volumes and LNG sales showing significant year-on-year growth.

CNOOC, drawing on its offshore energy development and technical capabilities, is focusing on offshore wind power and marine energy. The company has achieved breakthroughs in direct seawater electrolysis for hydrogen production, with the world's first megawatt-scale seawater electrolysis hydrogen generation system successfully entering trial operation.

In conclusion, China's NOCs are playing a crucial role in the country's energy security agenda, with a focus on domestic E&P, unconventional resources, and advanced EOR technologies. As China transitions towards a greener energy mix, the Big Three are leveraging their strengths to balance energy supply security with low-carbon development, presenting new opportunities for growth and development in the energy sector.

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