China has certified 147 million barrels of oil reserves in a new shale play operated by state energy giant Sinopec in the southwestern part of the country, as the world’s top crude oil importer look to boost domestic output.
China Petroleum & Chemical Corporation, or Sinopec, as it is more commonly known, announced on Thursday that the Chinese Ministry of Natural Resources certified 20.1 million metric tons, or 147 million barrels of oil, in the Fuxing shale play, as well as 12.35 billion cubic meters of natural gas reserves.
The Fuxing shale oil and gas field is in the Sichuan basin, and was the first successful predominantly oil play discovered in Sichuan, where companies have been mostly finding natural gas.
Sinopec now aims to expand exploration and evaluate similar resources in the Sichuan basin, according to a company statement carried by Reuters.
Earlier this year, China’s authorities certified 1.3 billion barrels of new reserves at Sinopec’s two shale plays in the eastern part of the country. The new shale oil reserves have been found at the Xinxing field in the Jiyang trough of the Bohai Bay basin and the Qintong field in the Subei basin.
However, the shale reserves are deep underground, at between 3,000 meters (9,842 ft) and 4,650 meters (15,256 ft) below surface.
Despite the presence of large shale oil and shale gas reserves, extraction in China is challenging and shale oil production accounts for just 1% of Chinese domestic output.
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 domestic oil and gas production in a bid to reduce its significant exposure to imported hydrocarbons.
By Charles Kennedy for Oilprice.com
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