Top Chinese oil and gas firm PetroChina (NYSE: PTR) struck high flow rates in a deep shale gas well in Chongqing in southwest China, the Xinhua News Agency reported on June 13.
The well Zu202-H1 yielded a daily output of 456,700 cubic meters of natural gas—about 3,000 barrels of oil equivalent—late last week in flow rate tests, the report said. Zu202-H1 is one of China’s deepest shale gas wells at 3,925 m (12,877 ft), it said.
This is the first commercially viable well PetroChina has struck in Chongqing, Zhong Bing, head of shale gas exploration for PetroChina’s upstream division in southwestern China, was cited as saying.
Xinhua, however, did not give an estimated size of the natural gas reserves found, and a PetroChina spokesman did not answer calls seeking more information.
PetroChina started drilling Zu202-H1 last October and completed drilling in February 2018, Xinhua said.
A government geologist said few deep shale wells in China so far have yielded such high flow rates.
“Deeper shale wells are technologically more challenging. If PetroChina can manage the development costs, it could be a promising discovery,” said the geologist, who declined to be named as he’s not authorized to speak to press.
Chongqing and Sichuan provinces are China’s top areas for shale gas development.
Second-largest oil and gas producer Sinopec Corp. (NYSE: SNP) has led the drive to develop the country’s largest commercial shale gas find at Fuling in Chongqing.
China produced 9 billion cubic meters of shale gas last year, about 6% of the country’s total gas output.
A county in southwestern China has ordered a halt to shale gas mining amid fears it may have helped cause an earthquake in the area that killed two people, state news agency Xinhua reported.
Tests of the first shale well at Cuadrilla’s site in northwest England show a rich reservoir of high quality and recoverable gas, the British firm said on Feb. 6, adding that rules that have constrained its testing work should be eased.
U.S. oil producers sought on Jan. 23 to soothe OPEC's worries about losing market share, telling the group that investors in the U.S. firms wanted a reduction in growth and higher payouts.