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China increases efforts to explore and develop shale oil

Author : PCEC

01 March 2021

The National Energy Administration of China recently held the 2021 shale oil exploration and development promotion meeting in Beijing to summarise the progress of the previous shale oil exploration and development work, study the next stage of research targets, work priorities and main measures, and make every effort to accelerate the development of shale oil exploration and development.

Image: Sinopec
Image: Sinopec

In 2020, China's crude oil production reached 195 million tonnes, an increase of 1.6% year-on-year, and production rebounded for two consecutive years; natural gas production reached 188.8 billion cubic metres, an increase of 9.8% year-on-year, and the output increased by more than 10 billion cubic metres for four consecutive years. In order to further increase crude oil production, it is necessary to break through multiple problems such as resource replacement, technological innovation and cost reduction, and seek strategic breakthroughs in new resources such as shale oil, the National Energy Administration has said.

The 2021 meeting mentioned that China will focus on key issues of technological innovation, deepen research on basic geological theories, and tackle new technologies and equipment suitable for shale oil exploration and development. CNPC, Sinopec, and the National Oil and Gas Strategy Research Center reported on shale oil resources, exploration and development progress and follow-up work projects.

At present, 46 countries in the world have proven shale oil and gas resources in more than 170 sets of shale formations in 104 basins. China is rich in shale oil resources, with about 4.4 billion tonnes of recoverable resources, ranking third in the world after Russia and the United States. As China becomes the world's second largest oil consumer and its dependence on crude oil exceeds 70%, shale oil is expected to become an important replacement resource.

Although China’s shale oil resources are relatively abundant, they are mainly distributed in the organic-rich shale in the Mesozoic-Cenozoic continental lake basin, but they are very different from North American shale oil in terms of forming conditions and development technology.

Most of North America is dominated by marine shale oil, which has a large area, high organic matter content, high maturity, high oil and gas abundance, strong fracturing ability, advanced technology, and low development cost. Shale oil in China is mainly distributed in the Bohai Bay Basin, Songliao Basin, Ordos, Junggar and other large sedimentary basins, as well as many "small and fat" small and medium-sized basins. It is mainly continental shale oil with relatively small area and organic matter content at the low level, the maturity and oil & gas abundance are medium level. At the same time, China shale oil exploration and development started late, the research level is low, the drilling and fracturing cycle is long, and the construction cost is high.


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