Qinghai Oilfield, in charge of oil and gas development in northwest China's Qaidam Basin, reported oil and gas output of 4 million tons in 2004.

The field produced 2.22 million tons of crude oil and 1.78 billion cubic meters of gas, according to latest statistics from the Qinghai Oilfield branch of the China National Petroleum Corporation.

The oilfield, which started production in 1954, has found 25 oil and gas fields in the basin, verifying and controlling 400 million tons of oil reserve and 400.5 billion cubic meters of gas reserve.

But owing to remote location and poor transportation condition, the crude output in the oilfield fluctuated at 300,000 tons annually in the first three decades of operation.

Since the 1990s, the Qinghai Oilfield has made a series of breakthroughs in exploration technologies, which has stepped up oil and gas development in the basin. The output of oil and gas has maintained a yearly growth rate of more tan 10 percent.