By Charles Kennedy – Oct 16, 2024, 3:00 AM CDT
China’s Sinopec has boosted oil production at a shale field from 100 tons per day in 2021 to 1,600 tons per day this year, the company said, as quoted by Reuters.
One metric ton of crude oil is equal to about 733 barrels, meaning the current production rate at the Jiyang field is around 11,700 barrels daily.
At this rate, state-owned Sinopec said, it would hit its target of an annual cumulative production rate of half a million tons at the Jiyang field next year.
Earlier in 2024, Sinopec announced an oil and gas discovery at another shale deposit in the Sichuan province in the southwest, estimating that the initial flows could lead to the discovery of around 100 million metric tons of hydrocarbons.
China has substantial shale resources, especially in natural gas, but extracting them is a challenge, unlike in the United States, due to the complex geology of the local shale formations.
Even so, shale exploration is an important part of China’s push to boost its reliance on domestic oil and gas production in a bid to reduce its significant exposure to foreign hydrocarbon resources.
The Jiyang field is part of that effort. Located in the Shandong province, home to most of China’s independent refiners, the field is part of a conventional deposit—Shengli—which has been producing for decades. The Jiyang field has reserves estimated at some 10.5 billion tons, of which 1.73 billion tons are in prospective reserves, according to Sinopec.
Efforts to boost domestic production of hydrocarbons are paying off, meanwhile. In 2023, the Chinese energy industry had a record year in both oil and gas production. In crude oil, the country produced around 4.2 million barrels daily, for a total of 208 million tons, which was 3 million tons more than the previous year. In natural gas, total output last year reached 230 billion cu m, of which 96 billion cu m came from unconventional resources, including shale, coalbed methane, and natural gas hydrates.
By Charles Kennedy for Oilprice.com
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