Photo taken on Sept. 27, 2019 shows equipment at Daqing Oilfield in northeast China's Heilongjiang Province. Photo: Xinhua

China National Petroleum Corp (CNPC) on Wednesday announced a new plan for a major shale oil field with an estimated geological reserve of about 1.27 billion tons in the Daqing Oilfield in Northeast China's Heilongjiang Province.

The exploration and drilling of the Gulong shale field in Daqing is good news for supplementing China's oil reserves, ensuring energy security and achieving the revitalization of Northeast China, experts said.

CNPC said that it had explored several key wells for shale oil and found some that can produce 30 cubic meters of oil per day, which performed stably in trial production. It is expected that this year, the oil-bearing area will expand to reach 1,413 square kilometers, with 1.268 billion tons to be added to national oil reserves.

The plan is an important supplement to China's oil reserves, but the exploration of the new field could face technological challenges and high costs, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Wednesday. 

"China has the capacity for large-scale commercial production, but it lags behind the US in shale oil exploration technology due to its complex geologic structures," Lin said.

China is rich in shale oil, with about 5 billion tons of recoverable oil, the third-largest in the world after Russia and the US. As the first to commercialize shale oil production on a large scale, the US now produces 240 million tons of shale oil annually, or 51 percent of global supply, according to China Petroleum Daily.

China's shale oil is mainly distributed in smaller pockets with low organic content, which makes commercial exploitation in China more difficult and expensive.

"To achieve highly efficient, profitable development, efforts still need to be made to cut costs and make breakthroughs in core exploration technology," he said.

Discovered in 1959, the Daqing Oilfield, located in Heilongjiang Province, is the largest oilfield in China and has played an important role in assisting China's economic development.

Chinese Premier Li Keqiang on Monday underscored efforts to further promote the full revitalization of Northeast China. While progress has been made in economic and social development in recent years, revitalization of the region remains at a critical stage, Li said.

In 2021, Daqing Oilfield operators plan to drill 100 wells for exploration of shale oil, 17 of which have met required production thresholds. During the 14th Five-Year Plan period (2021-25), the oilfield plans to add 1 billion tons of proven reserves and increase the annual production of shale oil to 1 million tons.

Global Times