Sinopec's Xinjiang oilfield has the potential to become one of the country's leading crude producers as reserves continue to swell, a senior company researcher has said.
Proven reserves at the Tahe Oilfield will hit 1 billion tons oil equivalent in three years as the country's second largest oil and gas producer steps up exploration efforts, Kang Yuzhu, a senior researcher with Sinopec Exploration & Production Research Institute, told China Daily.
Tahe currently has proven reserves of 780 million tons with the figure increasing by about 100 to 200 million tons per annum from its discovery in 1998. Extrapolating that growth rate, cumulative proven reserves can hit 1 billion tons by 2010, he said.
"The overall resource volume of Tahe Oilfield can be as large as 4 billion tons oil equivalent," Kang added.
Sinopec announced in May that it made a discovery in Block 12 of the Tahe field that holds an estimated reserve of 200 million tons of oil equivalent, strengthening the company's confidence in expanding the oilfield into a 10-million-ton-per-year production base.
Tahe's annual production is expected to double to 10 million tons by 2010, up from the estimated 5 million tons this year, Kang said.
PetroChina's Daqing oilfield is the biggest in the country, both in terms of annual production and reserves. Its current output is around 40 million tons oil equivalent per year and the oilfield has proven reserves of 4 billion tons.
The country's top oil company hopes its Xinjiang Tarim Oilfield will eventually make up for production decrease from old oilfields such as Daqing.
Sinopec's largest is Shengli Oilfield in Shandong Province, which is the country's second biggest. Its oil output hit 27.415 million tons last year.
Another Sinopec official, who did not want to be named, said the Tahe field is the largest marine-facies oilfield ever discovered in the country.
Marine facies, or geologic fossilized mineral content, are basins formed in ancient oceans, and have been proven to feature conditions conducive for oil or natural gas reserves.
As Asia's largest refiner and the biggest oil product supplier in China, Sinopec imported 70 percent of its crude for refining last year. Soaring oil prices last year increased the firm's 2006 refining loss to 25.3 billion yuan ($3.4 billion) from 3.54 billion ($470 million) a year earlier.
That leaves the firm with no option but to expand into upstream production, according to analyst Liu Gu at Guotai Jun'an Securities. "That is why the untapped potential of Tahe Oilfield carries great significance to the refiner," Liu said.
In the first half of 2007, Sinopec processed 76.25 million tons of crude, up 6.38 percent year-on-year.
China's consumption of refined oil products hit a record high in the first half of the year, totaling 106.112 million tons.
Consumption of crude oil was 173.03 million tons in the first half of the year, up 6.8 percent year-on-year.
(China Daily October 12, 2007)
