BEIJING, Jan. 11 (Xinhua) -- China's largest oil and gas producer -- China National Petroleum Corporation (CNPC) -- said its domestic crude oil output reached a record high of 106.6 million tons in 2006.

CNPC's natural gas production also soared over 20 percent year-on-year to hit 44 billion cubic meters, the company said, attributing the increase to the exploitation of a chain of new oil and gas fields.

CNPC said its production capacity last year was the highest in the company's history. It drilled 522 horizontal wells in 2006, more than in the six-year period from 2000 to 2005.

The output of horizontal wells is said to be triple that of straight wells, the type of well favored by CNPC up till now. Experts said that horizontal wells will significantly boost China's oil and gas output.