Chinese NOCs: upstream's top spenders double-down on domestic plays

In a world of increased capital discipline, the Chinese NOCs are bucking the trend and ramping up investment. It is a little-known fact that CNPC is the biggest spender of the past decade. Chinese NOCs have persistently sustained or increased domestic investment to reduce oil and gas import dependence. They face growing challenges to unlock newly discovered domestic barrels, but they have little strategic optionality since the nation’s energy security is their top priority. The NOCs are huge home turf explorers. E&A spend averaged over US$9 billion/yr over the last decade. Announced in-place volumes tend to be huge, but low recovery factors tell a different story. The NOCs are struggling against rising costs to convert deeper, more challenging resources into reserves.