Green shift, digitalization to step up in energy sector

China's oil and gas industry is entering a pivotal phase of high-quality development as it transitions into the 15th Five-Year Plan (2026-30) period, aiming to balance energy security with an accelerated shift toward green energy and digitalization.

Following several production records in 2025, the National Energy Administration has outlined a strategic roadmap to transform the sector into a core pillar of a modern, resilient energy system.

Liu Hong, director of NEA's oil and gas department, said the industry is moving beyond its traditional role to become a "comprehensive energy provider".

"As a pillar of the national economy, oil and gas remain fundamental energy sources and industrial raw materials, carrying the mission of ensuring supply while empowering the broader energy transition."

According to the NEA, the sector concluded the 14th Five-Year Plan (2021-25) with unprecedented momentum, with annual investment in exploration and development averaging 387 billion yuan ($56.57 billion), a 48 percent increase over the previous five-year cycle.

Domestic crude oil production last year reached approximately 216 million metric tons, while natural gas output hit 261.9 billion cubic meters — marking nine consecutive years of growth exceeding 10 billion cubic meters annually, the NEA said.

Both figures represent historic highs for the world's second-largest economy, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

The shift toward renewables has gathered speed, with traditional energy security remaining a top priority. Infrastructure development has also kept pace with production, he said.

China's long-distance oil and gas pipelines now exceed 200,000 kilometers in total length, supported by a domestic storage capacity of 54 billion cubic meters and a gas pipeline transmission capacity of over 400 billion cubic meters per year.

This national grid has been instrumental in stabilizing energy prices and supply despite international market volatility, said NEA's Liu.

During the 14th Five-Year Plan period, China maintained stable imports of an average of 540 million tons of crude oil and 167 billion cubic meters of natural gas annually, bolstered by four major strategic import channels.

According to the NEA, one defining feature of the 15th Five-Year Plan will be the deep integration of fossil fuels with renewable energy and digital technologies.

The country has already overseen successful pilot programs, including using green electricity to boost oil production and injecting over 11 million tons of carbon dioxide through carbon capture, utilization and storage technology, it said.

"The development of a new energy system provides a major opportunity for oil and gas transformation," Liu said.

He highlighted that oil and gas fields are uniquely positioned to become "comprehensive energy suppliers" because they often possess abundant solar, wind and geothermal resources alongside existing infrastructure.

The NEA is accelerating a low-carbon transformation by evolving traditional oilfields into "multi-energy hubs" that integrate renewables, supported by the deployment of artificial intelligence across the value chain to enhance everything from smart exploration to predictive grid scheduling.

For 2026, the NEA will prioritize "artificial intelligence plus oil and gas" initiatives to improve the efficiency of exploration, grid scheduling and supply-demand forecasting.

It aims to establish a modern industrial system that is green, low-carbon and internationally reliable, to ensure a robust start to the new planning cycle of the 15th Five-Year Plan for the oil and gas sector.

It vows to continue pushing for upstream expansion in major basins to secure domestic energy supplies and guarantee stable crude output, while enhancing infrastructure connectivity by optimizing the national gas backbone and exploring the transport of green hydrogen through existing pipelines.

The 2026 roadmap also emphasizes global cooperation and market reform to foster a more efficient global and domestic marketplace, including strengthening trade ties with resource-producing nations, said Liu.

zhengxin@chinadaily.com.cn