China, the world’s largest oil refiner, is embarking on a bold transformation—trimming outdated refineries and pivoting toward specialty chemicals. This move aims to resolve overcapacity, stimulate economic efficiency, and align with the nation’s evolving energy demands and environmental goals.
Massive refining capacity: China’s refining capacity exceeded 18.2 million barrels per day (bpd) in 2024 and is projected to surpass 21 million bpd by next year.
Underutilization & mounting losses: Utilization sits at just 75–76% on average, with independent or “teapot” refineries operating as low as
Policy–driven closures: Up to 10% of refining capacity may be phased out over the next decade, with some smaller state plants already shuttering—for instance, PetroChina’s Dalian refinery (410,000 bpd) is slated for closure around mid-2025 and replacement by a smaller, integrated petrochemical facility
The project introduces state-of-the-art water injection technology designed to sustain reservoir pressure and improve oil recovery rates. This includes modern water treatment and reinjection systems tailored for high-efficiency operations.
CPECC’s plan includes the deployment of:
To ensure optimized implementation, the project is divided into two strategic stages:
The current system, with a capacity of 300,000 barrels per day, will be expanded to support 1.5 million barrels per day, significantly boosting the field’s productivity and overall output.
This development aligns with Iraq’s broader goals to strengthen its energy production capabilities while ensuring long-term oilfield sustainability through effective reservoir management.
This project highlights China’s growing involvement in Iraq’s energy sector, setting new benchmarks in oilfield efficiency, sustainability, and bilateral cooperation.