China’s Sinopec, CNPC Discover More Oil, Natural Gas Resources

BY JAMISON COCKLIN

August 27, 2021

China Petroleum & Chemical Corp., aka Sinopec, has reportedly announced another oil and natural gas discovery in the Tarim Basin.

The state-owned company said on Chinese social media that it had discovered 100 million tons of oil and gas resources in the legacy-producing region, according to Reuters. That’s roughly the equivalent of 733 million bbl of oil.

An exploration well drilled in the field in Northwest China produced about 6,315 b/d of oil and 20.8 MMcf/d of natural gas, the company said. No further details were provided.

The Xinhua news agency also reported that another state-owned operator, China National Petroleum Corp. (CNPC), made an unconventional oil discovery in the Daqing oilfield in Northern China. Xinhua said CNPC estimated 1.27 billion tons, or 9.3 million bbl, of resources.

The Daqing field has long been a major source of China’s crude output. However, the national oil company (NOC) has boosted its efforts to discover unconventional resources in the Songliao Basin where Daqing is located.

The news follows another announcement from Sinopec earlier in August that it’s booked more unconventional natural gas reserves in the Sichuan Basin. In June, CNPC also said it had an additional oil and gas discovery in the Tarim.

China is the world’s top crude importer. It’s also poised to surpass Japan this year as the world’s largest liquefied natural gas importer.

As a result, the Chinese government in 2018 called on its NOCs to start raising domestic output levels. The country also has opened to foreign companies to develop natural gas to increase domestic supplies.

China has invested in technically challenging hydrocarbon areas such as shale and tight gas. Since unconventional resources are deeper and more tectonically fractured in China, operators have faced higher drilling costs and development challenges.

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