Current Status and Prospect of Unconventional Oil and Gas Development in China

Zhang, Xiangning; Cui, Baochen; Deng, Huaiqun; Cai, Lei; Gong, Bentao; Ge, Chunmei

Stable oil and gas supply is essential for China's economic growth and is also one major concern of China's economic policy. Maintaining the production from old domestic oil and gas fields is getting harder. Besides, major basins in China are getting mature in respect to exploration. For these reasons, China needs to open new energy domains and put more efforts into the exploration and development of unconventional oil and gas in the near future. For tight gas, giant fields in the Ordos Basin have been developed successfully. The Permian Shanxi Formation of Changbei delivered very high production rate and reached production plateau in 2008. Sulige is the fastest-growing gas field in China. Technology advancement and new operation strategy play important roles. For shale gas, Southwestern China is the chief target. Preliminary resource assessment shows good potential in this area. Several exploration wells in the Sichuan basin have achieved economical production rate which means Cambrian Qiongzhusi petroleum system and Silurian Longmaxi petroleum system have a certain amount of recoverable resources. Especially, two wells of A Block of Fushun project, which is a cooperation project between CNPC and Shell, yielded very high test rate. The results prove that there exist sweet spots in the Silurian Longmaxi shale play. This shale play has similar parameters with North American shale plays. TOC is 0.5%-4% and thermal maturity (Ro) is above 2%. Compared with North America, however, the Longmaxi shale is buried deeper and the porosity is lower. Furthermore, mountains and dense population are big challenges for large-scale shale gas development. For shale oil, Northwestern and Northeastern China as well as the Bohai Bay Basin, are the target areas. Though the exploration of shale oil just began, certain progresses have been made. The drilling of shale oil in the Jungar basin has been initiated and the Turpan-Hami basin also shows good shale oil potential. It is predicted that China will keep speeding up the exploration and development of unconventional oil and gas through international cooperation and domestic research and development of technology in the next 3-5 years. Production scale of tight gas will increase dramatically. Several shale gas projects and shale oil projects will conduct pilot tests and produce on a certain scale. Unconventional oil and gas will play a more important role in the energy industry of China.

AAPG Search and Discovery Article #90163©2013AAPG 2013 Annual Convention and Exhibition, Pittsburgh, Pennsylvania, May 19-22, 2013