China's oil producers shift policy with scale back

A shift in Beijing’s priorities away from production targets has allowed Chinese oil companies to halt output in maturing oilfields, a previously politically unpalatable decision that leaves them better placed for an eventual recovery in oil prices, the Financial Times reports. International majors routinely scale back production from high-cost fields when oil prices fall, but in China, for decades, the government mandate has been to increase domestic supply and ensure energy security. In the past week both PetroChina and Sinopec reported declines in oil production for the first half of the year. Sinopec said domestic crude oil output fell 13% versus a 3% drop in its overseas operations, while PetroChina reported a 4% decline in domestic production. Profits at both have fallen drastically.