Challenges and technological development trend of Chinese Upstream Petroleum Industry
The implementation of the national major science and technology (NMST) project “development of large oil and gas fields and coalbed methane” over the two decades has significantly improved the level of science and technology of China's upstream petroleum industry. The overall strength and technical level of the major state-owned enterprises such as PetroChina, Sinopec, and CNOOC are now in line with the international petroleum industry counterparts. Over the past two decades, thirteen major petroleum exploration and development equipment systems have been developed, and 22 demonstration and pilot projects have been established. The NMST project have helped China to achieve her total oil and gas production targets. However, with surging economic and social development, China's demand on oil and gas has increased rapidly in recent years. In 2017, oil and gas demand reached 588 million tons (4.3 billion bbl) and 235.2 billion cubic meters (8.3 TCF), respectively. As a result, China's dependence on overseas oil and gas supply continued to rise. In 2017, the dependence on foreign oil and gas reached 67.4% and 37%, respectively. It is estimated that by 2035, China's oil and gas demand will increase to 700 million tons (5.1 billion bbl) and 620-700 billion cubic meters (21.9-24.7 TCF)), respectively. The main challenge for China's petroleum industry in the future is to meet the increasing demand for oil and gas during China's modernization and to ensure an appropriate domestic oil and gas supply and storage in the event of complex international geopolitical and security situations. Despite decades of exploration and development, there are still significant amount of remaining oil and gas resources in China, including remaining recoverable reserves in mature fields, proven but undeveloped oil and gas reserves, and new oil and gas resources to be discovered. These remaining resources can sustain a stable annual production of oil of 200 million tons (1.5 billion bbl), and annual gas production of 260-300 billion cubic meters (9.2-10.6 TCF) over a relatively long period, providing a basic need for national energy security. However, further oil and gas exploration and production in China faces a range of challenges in order to maintain a sustainable increase of domestic oil and gas production including (1) new geological theory and engineering know-hows in emerging areas such as “deep strata and deep water”; (2) innovative technologies for enhanced oil recovery in old oilfields with high water-cut and low permeability reservoirs; (3) technical and equipment constraint on large-scale commercial development of unconventional oil and gas (e.g. achieving an annual output of 100 billion cubic meters (3.5 TCF) of shale gas). There are also a number of "bottle-neck" technologies and equipment that constrain China’s effective petroleum exploration and development but the situation cannot be changed in a short term. Therefore the main challenges for China's upstream petroleum industry are to develop advanced technology and equipment for exploring and developing deep-strata and deep-water oil and gas, giant and complex gas fields and unconventional oil and gas, and to build a new generation of petroleum engineering service technology and equipment.
AAPG Datapages/Search and Discovery Article #90340 ©2018 AAPG Geoscience Technology Workshop, Deep and Ultra Deep Petroleum Systems, Beijing, China, October 26-28, 2018