The China National Petroleum Assessment (2003-07) evaluated coalbed methane, oil shale, and oil sands resources in Chinese onshore basins.
CBM recoverable resources in China are 11 trillion cu m. CBM resources are mainly distributed in 11 large basins (including Ordos, Qinshui, and Erlian). China's CBM production is forecast to reach nearly 30 billion cu m in 2030.
Resources of shale oil are 243.2 billion tons, and recoverable resources of shale oil are 12 billion tons in 25 evaluated basins. Nine basins (including Songliao, Ordos, and Lunpola) contain more than 100 million tons of recoverable shale oil resources. China's shale oil production is predicted to attain 6 million tons in 2030.
China's oil sands recoverable resources are 2.3 billion tons. Seven basins (including Jungar, Tarim, and in northern Tibet, Qiangtang) have oil sands recoverable resources that exceed 100 million tons. Chinese production of oil from oil sands is forecast to reach 2.5 million tons in 2030.
Unconventional oil and gas will play an active role in the future petroleum exploration and development in China.
This is the second of two parts about the 2007 China National Petroleum Assessment. The first part covered conventional oil and gas resources (OGJ, Apr. 19, 2010, p. 32).
Introduction
As a major producer of crude oil in the world, China has a net oil export history of nearly 30 years. The country became a net oil importer after 1993, and annual oil imports have increased gradually since then.
In 2009, oil production was 189 million tons, oil consumption was 388 million tons, and net imports were 199 million tons.
In order to improve national petroleum support capacity, China has accelerated oil and gas exploration and exploitation. China has recently paid more attention to unconventional petroleum (including CBM, oil shale, and oil sands) as important supplements to conventional oil and gas. The Chinese government has enacted a series of laws and policies to stimulate exploration and exploitation of unconventional petroleum resources.
Status of unconventional resources
Coalbed methane
Since the US Bureau of Mines, US Department of Energy, Gas Technology Institute, and oil and gas operators made a concerted effort to demonstrate commercial production of CBM from vertical wells in the 1970s and early 1980s, CBM as a mining hazard has been harnessed as a natural gas resource in the US.1 2
In China, CBM exploration and exploitation history is roughly divided into three stages: the mine methane exploitation stage (1952-89), the advanced exploration and development technologies introduction stage (1989-95), and the initial commercial development stage (1996 to present).3-5
At the end of 2009, China's CBM proved reserves were 55 bcm. CBM production in 2009 was 0.7 bcm.
At present, Chinese companies including China United Coalbed Methane Corp., PetroChina Co. Ltd., China Petroleum & Chemical Corp., and Jincheng Anthracite Group (JAMG) and foreign companies such as Royal Dutch Shell PLC and Chevron Corp. are exploring and exploiting CBM in the south of the Qinshui basin, Fuxi coal mines, central part of the Hedong coal field, Hancheng coal field, etc.
Oil shale
Shale oil is not competitive with oil, natural gas, or coal, but it is explored and exploited in some countries (including Estonia, Russia, and China).6
The history of shale oil exploration and exploitation in China is roughly divided into three stages.
In the 1950s, much exploration and development were performed on oil shale, refined shale oil was one half of the country's annual oil production, and the oil shale industry was flourishing.
From the 1960s to the 1990s, oil shale extraction and refining halted with a rapid increase in conventional oil production.
Since 1990, and especially since 2000, the oil shale industry has revived and developed quickly as the result of a growing oil demand and high oil prices.7 8
Since 2004, shale oil exploitation and utilization have been accelerated, and some oil shale deposits (including the Huadian of Jilin Province, Luozigou, Fushun of Liaoning Province, Maoming of Guangdong Province, and Longkou of Shandong Province) have been exploited one after another.
At the end of 2008, nationwide proved reserves of shale oil were 35 billion tons. Shale oil production was 350,000 tons in 2008.
Oil sands
Venezuela, western Canada, and the US have large volumes of oil sands resources.9
The exploration and exploitation maturity level of oil sands is low, and oil sands are at the stage of resources survey and exploitation experiments in China.
PetroChina has begun to investigate oil sands in Jilin, Inner Mongolia, Xinjiang, and Sichuan provinces and conducted separation experiments of oil sands, especially at Kelamayi in Xinjiang Province, where dry distillation and water-washing technologies of oil sands are preliminarily developed, and production capacities of oil sands are expected to reach 100,000 tons in 2015.
Lab experiments, small scale in situ tests, and field pilots have been finished at the Tumuji oil sands mine in Inner Mongolia.
Unconventional resources
Coalbed methane
In light of the China National Petroleum Assessment (2003-07), CBM resources are 37 tcm in formations shallower than 2,000 m in 42 evaluated basins, and CBM recoverable resources are 11 tcm in formations shallower than 1,500 m in the same basins.
CBM resources have the characteristics of more resources in bigger-scaled basins and fewer resources in middle and smaller-scaled basins. There are nine basins with resources of more than 1 tcm, including the Ordos, Qinshui, Jungar, Diandongqianxi, Erlian, Tuha, Tarim, Tianshan, and Hailar basins.
The richest basin is Ordos, wherein CBM resources are 10 tcm and are 27% of the national total. The second richest basin is Qinshui, with resources of 4 tcm or 11% of the national total.
Oil shale
China's resources of oil shale are 719.9 billion tons, recoverable resources of oil shale are 243.2 billion tons, resources of shale oil are 47.6 billion tons, and recoverable resources of shale oil are 16 billion tons.
Chinese oil shale has the characteristics of abundant resources, wide distribution, medium and high oil content, and low exploration maturity.
Three basins, Songliao, Ordos, and Jungar, are abundant in oil shale. Oil shale resources of the three basins total 76.8% of the country total. Several proved and developed oil shale deposits are in the Fushun, Maoming, and Dunmi basins. Nine basins (Songliao, Ordos, Lunpola, Jungar, Qiangtang, Maoming, Qaidam, Dayangshu, and Fushun) hold more than 100 million tons of shale oil recoverable resources.
The total shale oil recoverable resources of these nine basins is 96% of the nationwide total.
Oil sands
Resources and recoverable resources of oil sands are 6 billion tons and 2.3 billion tons, respectively, in 24 basins of China.
Oil sands have the features of small ore-containing area, poor quality, complex types, and a small number of good-quality resources.
Oil sands resources in 11 basins—Jungar, Tarim, Qiangtang, Ordos, Qaidam, Songliao, Sichuan, Majiang-Engan, Guizhong, Kumukuli, and Erlian—exceed 50 million tons. Oil sands resources and recoverable resources of these basins are 97.6% and 97.5%, respectively, of nationwide resources.
Oil sands resources in five basins—Jungar, Tarim, Qiangtang, Qaidam, and Songliao—are over 400 million tons.
Table 1 illustrates the distribution of unconventional petroleum resources in China. It shows CBM, shale oil, and oil sands resources distribution by region, formation, depth range, and resource quality.
CBM resources are separated into three depth intervals in the methane weathering zone, but considering the limitation on CBM exploitation technology, recoverable resources at 1,500-2,000 m are not calculated.
Depth ranges of the oil shale and oil sands are divided into two intervals of 0-500 m and 500-1,000 m. In light of resource conditions, CBM is classified into first, second, and third classes. With greater resources and resource richness and more favorable exploration and exploitation conditions, the first class resources have higher quality than the other two classes.
Concerning oil content, oil shale is grouped into three classes of 3.5-5%, 5-10%, and >10%, and oil sands are grouped into three classes of 3-6%, 6-10%, and >10%.
Exploration and exploitation
Coalbed methane
As CBM's recoverable resources are half that of conventional natural gas resources, CBM is the most realistic supplement of conventional natural gas.
CBM exploitation saves energy, improves accident prevention in coal mines, and decreases greenhouse gas emissions. As a kind of efficient and clean energy, CBM will bring enormous economic and social benefits and improve the energy consumption structure of the country.10 11
China's CBM production is forecast to reach 5 bcm at the end of 2010. After 2010, with the progress of its exploration and exploitation technologies, CBM exploration scope will gradually increase.
In 2020, 10-15 CBM production bases will be established, and CBM production will exceed 20 bcm.
After 2020, CBM commercial production and industrialization will accelerate further. At the end of 2030, 20-30 CBM production bases will be built, and CBM production will attain nearly 30 bcm (Fig. 1).
Oil shale
Oil shale resources are plentiful, and recoverable shale oil resources are nearly half of conventional oil in China, so oil shale will be an important supplement of conventional oil in the future.
Not only can oil and gas be refined from oil shale, but also oil shale is used in electric power generation, chemical engineering, medicine, architecture, agriculture, etc. Therefore, it is better for oil shale exploitation to adopt joint operation of oil refinery, chemical substances extraction, electric power generation, poly-metal extraction, and building materials manufacture.8
At present, Chinese oil shale exploration maturity is low and development scale is small. With more and more attention to oil shale and exploitation investment growth, shale oil production will increase rapidly.
The shale oil production of the country is predicted to reach 0.5 million tons in 2010, 3 million tons in 2020, and 6 million tons in 2030 (Fig. 1). In the long run, shale oil will become an important complement and alternative to conventional oil in China.
Oil sands
With a small number of resources, oil sands can also be complementary to conventional oil.
At present, oil sands exploration maturity is very low, and development is at the experimental stage. There will be no production of oil sands in 2010.
After 2010, with technology progress and exploitation cost decrease, oil sands production will grow steadily. The country-wide production of oil sand is forecasted to attain 1.5 million tons in 2020 and 2.5 million tons in 2030 (Fig. 1).
References
1. Ayers, W.B., "Coalbed gas systems, resources, and production and a review of contrasting cases from the San Juan and Powder River basins," AAPG Bull., Vol. 86, No. 11, 2002, pp. 1,853-90.
2. Flores, R.M., "Coalbed methane: From hazard to resource," International Journal of Coal Geology, Vol. 35, 1998, pp. 3-26.
3. Ye, J.P., "Advances in exploration and development of coalbed methane in China: A review," Geological Bull. of China (in Chinese), Vol. 25, 2006, pp. 1,074-78.
4. Sun, M.Y., "Suggestions and status for the development of China's CBM industry," Energy of China (in Chinese), Vol. 11, 2002, pp. 27-30.
5. Zhang, X.M., Zhuang, J., and Zhang, S.A., "Coalbed methane geology and resource assessment," Science Press (in Chinese), Beijing, 2002, 294 pp.
6. Dyni, J.R., "Geology and resources of some world oil-shale deposits," US Geological Survey Scientific Investigations Report 2005-5294, 2005, 49 pp.
7. Liu, Z.J., Dong, Q.S., Ye, S.Q., Zhu, J.W., Guo, W., Li, D.C., Liu, R., Zhang, H.L., and Du, J.F., "The Situation of Oil Shale Resources in China," Journal of Jilin University, Earth Science Edition (in Chinese), Vol. 36, No. 6, 2006, pp. 869-875.
8. Liu, R. and Liu, Z.J., "Oil shale resource situation and multi-purpose development potential in China and abroad," Journal of Jilin University, Earth Science Edition (in Chinese), Vol. 36, No. 6, 2006, pp. 892-898.
9. Wennekers, Henri J.N., "Tar Sands," AAPG Bull., Vol. 65, No. 10, 1981, pp. 2,290-93.
10. Guo, L.J., "Prospecting and developing potentiality and policies analysis on China's CBM resources," China Mining Magazine (in Chinese)., Vol. 14, No. 10, 2005, pp. 1-4.
11. Zhou, X.H., and Li, H.F., "Development strategies and relevant policy of coalbed methane gas industry," Energy of China (in Chinese), Vol. 7, 2001, pp. 15-17.
The authors
Chenglin Liu ([email protected]) was with the Research Institute of Petroleum Exploration and Development, PetroChina from 1994 to 1999 and has been with China University of Petroleum working on petroleum resources assessment since 2004. He received a BA in petroleum geosciences and a PhD in mineralogy, petrology, and mineral deposit geology from China University of Petroleum.
Changbo Che ([email protected]) was with Geological Survey Division, Ministry of Land and Resources from 1996 to 2002 and has been with Strategic Research Center for Oil & Gas Resources of the Ministry of Land and Resources working on energy policies and petroleum resources assessment since 2002. He received a BA in economics from NanKai University.
Jie Zhu ([email protected]) has been with Strategic Research Center for Oil & Gas Resources of the Ministry of Land and Resources, working on petroleum resources assessment and energy strategy, since 2007. He received a BA in petroleum geosciences and a PhD in geological resources and geological engineering from China University of Petroleum.
Hulin Yang ([email protected]) was with Geological Survey Division, Ministry of Land and Resources from 1986 to 2001 and has been with Strategic Research Center for Oil & Gas Resources of the Ministry of Land and Resources working on petroleum resources economic assessment and energy strategy since 2001. He received a BA in economics from NanKai University.
Dubai
A Persian Gulf oil discovery claimed by Dubai early this year turns out to be a redrill of a 1986 dry hole.
No downhole information is available on the new well, which IHS Inc. confirmed is a reentry-sidetrack of Jadid-1. Dubai Petroleum Co. drilled Jadid-1 in July-October 1986 as an apparent vertical dry hole. Original total depth is 11,438 ft. Dubai in February 2010 claimed an oil discovery named Al Jalila east of Rashid oil field (OGJ Online, Feb. 8, 2010).
Russia
PetroKamchatka PLC, St. Helier, Jersey, UK, has spud the Chernorechenskaya-1P well on the Tigil exploration block in Kamchatka, Russia, and expects to drill to 3,300 m.
PetroKamchatka is evaluating data from the Oyarskaya-1P, suspended in January 2010, which biostratigraphic studies indicate didn't reach its primary target.
Early interpretation of the vertical seismic profile indicates a possible deeper basement reflector at a depth within the drilling capacity of the company's rig. More formation evaluation studies are under way, and these studies plus results of the Chernorechenskaya well will help determine whether to deepen at Oyarskaya.
Louisiana
Cubic Energy Inc., Dallas, said its 2010 Haynesville shale drilling program spending could exceed $40 million.
Based on projections by operators of Cubic's Haynesville acreage, Cubic is set to participate in as many as 13 gross and 4.62 net horizontal Haynesville shale wells at 36.2% working interest in calendar 2010.
Meanwhile, Cubic announced a peak 24-hr flow rate of 1.35 MMcfd/frac stage from the Red Oak 6-1 well in Bethany-Longstreet field, Caddo Parish, La. At the well, in which Cubic holds 35% working interest, five of 15 planned frac stages were pumped due to a casing breach at 11,000 ft. Another well with 10-15 frac stages is planned for the same location.
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