China's tired fields

China's output is continuing to slow, which is good news for exporters targeting the country

The Daqing field provides a fair illustration of why China's demand for imported crude should keep rising through 2017 and beyond. One of the country's biggest and oldest resources famed for the "Iron Man" legend, its production fell by about 3% in 2016 and further declines are likely. The operator, China National Petroleum Corporation, announced it will slash its exploration and engineering budget for Daqing by 20%. China's fundamental problem is tired fields and increasingly uneconomic costs of production at today's oil price. As Nomura's head of Asia-Pacific oil and gas research, Gordon Kwan, pointed out in a note earlier this year: "China's largest oilfields are ageing rapidly. Advanced