The Far East remains an outlet for crude oil which is potentially in excess in other major oil-producing areas. Competition for the market in Japan, in particular, may become very keen in the near future. Production from Japan's newly discovered oil in the Persian Gulf will no doubt cut into the sales in Japan of other Middle East producers. Russia will compete with noncommunist producing areas in supplying some Far East markets. Oil production in communist China may soon exceed the indigenous requirements and such excess crude oil will be available for export. China's largest oil refinery went on stream during 1959, at Lanchow, Kansu province. Gas also will cut into the oil markets of the Far East. Japan is expanding its gas production and brought in large gas reserves during 1959. All producing areas of the Far East showed an increase in crude oil production during 1959, with the exception of Java, Netherlands New Guinea, and perhaps Sakhalin. The total oil production in the Far East in 1959 was 221,662,802 bbls. compared with 190,375,439 bbls. in 1958, a gain of more than 30 million bbls., about 18%. Two small producers were drilled on the island of Cebu in the Philippines to be rated as the first commercial oil wells in the Philippine Islands.

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