The drill site at Longdong Oilfield in Northwest China’s Gansu province. GANSU PROVINCIAL PEOPLE’S GOVERNMENT
The addition of one billion metric tonnes of oil to the geological reserves of the Qingcheng oilfield, Gansu province, will help wean China off its reliance on oil imports and safeguard the country’s energy security, industry experts have said.
PetroChina Changqing Oilfield Company, a regional branch of China’s top oil and gas producer Petro-China, recently announced that it had discovered new geological reserves of one billion tonnes of shale oil at its Qingcheng oilfield in the Ordos Basin, of which 358 million tonnes had been proved.
That amount is equal to almost three times the refined oil China consumed last year, which was about 325 million tonnes, data from the National Development and Reform Commission shows.
During the same period, China’s crude oil production was only 189 million tonnes, 1.3 per cent down compared with that in 2017, said a report released in April by the China Electric Power Planning and Engineering Institute.
“The newly announced geographic oil reserves in Qingcheng add a large amount to China’s total oil reserves, which means a higher chance for China to significantly increase domestic oil output and reduce foreign oil reliance,” said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
Though the entire volume can be proved or extracted at the moment, the new oil reserves could greatly improve China’s ratio of proven oil reserves to annual production, which was only about 10 before the discovery, Lin said.
China, the world’s second largest oil consumer and largest oil importer, imported 440 million tonnes of crude oil last year, a year-on-year increase of 11 per cent, with its foreign oil dependency ratio reaching 69.8 per cent, according to China National Petroleum Corp’s Economics and Technology Research Institute.
Lin said the new discovery will spur industry’s confidence in domestic oil detection and exploitation, as it proved China has been scaling up technologies for production and use of unconventional oil.
With more investment inflows into unconventional oil sector, as shown by the case of Changqing oilfield, the production costs of unconventional oil will be reduced very quickly and will ultimately contribute largely to domestic crude oil output, he said.
The company said Qingcheng oilfield has been stepping up the drilling of wells since 2017. So far it has completed the drilling of 216 horizontal wells, among which 100 have been put into use, with daily crude oil production reaching 1,464 tonnes.
The company said the oilfield will finish drilling 255 horizontal wells by the end of this year, forming an annual crude oil production capability of one million tonnes.
By the end of 2025, the annual crude oil production capability at the oilfield will hit five million tonnes, the company said.
Luo Shunshe, a professor with the School of Earth Sciences at Yangtze University in Wuhan, Hubei province, said China’s exploitation of unconventional oil resources is catching up quickly.
CHINA DAILY/ASIA NEWS NETWORK
