Shell, Sinopec wrapping up Northwest China basins geological studies

March 6, 2002
China Petroleum & Chemical Corp. (Sinopec) and Royal Dutch/Shell Group plan to complete in April a geological study of five blocks in northwestern China's Tarim and Ordos basins.

By an OGJ Online Correspondent
BEIJING, Mar. 6 -- China Petroleum & Chemical Corp. (Sinopec) and Royal Dutch/Shell Group plan to complete in April a geological study of five blocks prospective for oil and gas in northwestern China's Tarim and Ordos basins.

The study, which started last year, is part of the strategic partnership between the two companies that was formed when Shell invested in Sinopec's initial public offerings last October.

Two of the blocks in the Ordos basin, bordering the Inner Mongolia Autonomous Region and Shaanxi province, have potential for medium-sized gas fields.

In the northern Tarim basin, the companies are studying geological data on three blocks, one of which is thought to contain gas and condensate.Of the other two Tarim blocks, chances are high for confirming significant crude reserves, government sources said.

After completion of the study, the two companies will decide whether to enter into production-sharing contracts to further explore and develop hydrocarbons on the five blocks. Sinopec's possible joint venture with Shell is subject to government approval.

Currently, Sinopec unit Sinopec Star Petroleum Co. Ltd. is producing oil and gas in the Tarim basin. In January, Sinopec Star produced 220,400 tonnes of crude oil, up 44% on the year. The bulk of Sinopec Star's Tarim basin crude production is from Tahe field.