China National Petroleum Co. (CNPC) said on Aug. 25 it plans for new shale oil production from formations within the area of the existing Daqing oil field that will help replenish that site's diminishing output.
CNPC said it aims to produce 1 million tonnes of oil annually by 2025 from the Gulong shale oil formations at Daqing in northeast China's Heilongjiang province.
CNPC has drilled several key exploration wells in the Gulong formation including the Guyeyouping 1, Yingye 1H and Guye 2HC, all of which have yielded high volumes of oil in test production.
As China's biggest oil field, Daqing has pumped for the past 60 years but its reserves are quickly depleting and CNPC is turning to shale formations near the field to replace the output.
CNPC has stepped up research and drilling in the Songliao basin where Daqing is located for unconventional oil resources that require technologies such as horizontal drilling and hydraulic fracturing.
Calling it a "strategic breakthrough" in continental-based shale oil, CNPC has identified so far this year oil bearing zones in the Gulong formation with a size of 1,413 sq km (546 sq miles) that added 1.268 billion tonnes worth of geological reserves.
"The Gulong shale oil campaign helps to cement Daqing's position as China's largest onshore oilfield as it struggles to replace reserves ... it contributes to ensure national oil supply security," Fang Qing, general manager of Daqing oil field, said at media briefing carried by Heilongjiang provincial television.
CNPC said plans to drill a total of 100 wells into the Gulong this year, having completed 58 so far and 17 of those are producing industrial volumes.
China is in the initial stages of developing its vast shale gas resources, with production last year making up a tenth of total gas output after more than a decade of work.
China's shale oil is at a more basic phase due to challenging geology and hefty development costs, experts have said.
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