Top Chinese oil and gas major PetroChina is exploring shale oil in an aging western China basin and aims to build a pilot zone to pump one million tonnes of crude a year, or about 20,000 bbl/d, by 2025.

The state giant started drilling four horizontal wells in Yingxiongling in Qinghai oil field, part of the Qaidam Basin in the western province of Qinghai where oil exploration began in the 1950s, Petrochina’s parent company CNPC said on March 29.

PetroChina aimed to build the pilot zone with annual production of 100,000 tonnes this year, expanding to 500,000 tonnes a year by 2023, after having achieved breakthroughs in explorations in 2021, CNPC said on its website.

The shale oil structure is located at an average altitude of 3,200 m to 3,800 m above sea level and is typical of high pressure and high output, the company said.

China produces only 35,000 bbl/d of shale oil mostly in the northern Ordos Basin and northwestern Jungar Basin, less than 1% of national oil output.

Under Beijing’s call to enhance domestic energy supply security, state energy giants are spending more to develop more geologically challenging formations to compensate for fast declining reserves in mature oil fields like Daqing.

China, which imports more than 70% of its crude needs, intends to maintain domestic oil production at about 4 million bbl/d for years to come.