Energy supplier will ramp up efforts to develop clean fuel and reduce imports
China National Petroleum Corporation, the country's largest oil and gas producer and supplier, reported steady daily production of shale oil of 20-30 cubic meters in its Dagang Oilfield, a sign of the industrial development of continental shale oil in the Bohai Bay Basin, it said.
CNPC aims to produce 50,000 metric tons of shale oil from the Bohai Bay Basin by the end of 2019 and to achieve production of 500,000 tons of shale oil by 2025 to further develop the clean fuel and ensure national energy security.
Dagang Oilfield, of which the construction started in 1964, is the third oilfield that China independently explored after the Daqing and Shengli oilfields.
According to a forecast by the International Energy Agency, China sees abundant shale oil resources with recoverable resources reaching 4.5 billion tons and ranks third worldwide only after Russia and the United States.
CNPC vows to ramp up its efforts in the exploration of shale oil and prioritize shale oil-related exploration at the Bohai Bay Basin, Songliao Basin, Ordos Basin and Junggar Basin to further ensure national energy security and reduce reliance on oil import.
The country is now the biggest crude and gas importer in the world, importing 440 million tons of crude oil in 2018, a year-on-year increase of 11 percent, and 125.4 billion cu m of gas, a year-on-year increase of 31.7 percent.
Li Li, research director at energy consulting company ICIS, said the exploration of shale oil will help ease the country's high foreign dependence ratio for oil and gas, which has reached 69.8 percent and 45.3 percent respectively, and is expected to continue rising in 2019, according to the CNPC Economics and Technology Research Institute.
As the government is stepping up efforts to boost domestic energy supply, the country's major national oil companies, including CNPC, China National Offshore Oil Corp and China Petroleum and Chemical Corp, the country's biggest geothermal developer, have been enhancing oil and gas exploration recently, aiming to increase domestic oil and natural gas production at the world's largest crude oil importer.
Morgan Stanley said earlier as shale drilling could finally have a true commercial potential in China, the potential for more drilling would likely increase capital expenditure for shale this year and benefit onshore oilfield service companies.
Morgan Stanley expects Chinese shale oil production could be 100,000-200,000 barrels per day by 2025.
