OIL FLOW RISING IN E. CHINA REGION

Jan. 1, 1990
Production is building from an oil producing area in the lower reaches of the Yangtze River in eastern China's Jiangsu Province. The northern Jiangsu oil area, under development by Jiangsu Oil Exploration Corp. (Joeco) since 1975, is expected to produce an average 20,000 b/d this year. The area is thought to have produced about 16,000 b/d of oil during 1989, accounting for about one fifth of Jiangsu Province's demand. Cumulative production through 1988 was about 39 million bbl of oil

Production is building from an oil producing area in the lower reaches of the Yangtze River in eastern China's Jiangsu Province.

The northern Jiangsu oil area, under development by Jiangsu Oil Exploration Corp. (Joeco) since 1975, is expected to produce an average 20,000 b/d this year. The area is thought to have produced about 16,000 b/d of oil during 1989, accounting for about one fifth of Jiangsu Province's demand.

Cumulative production through 1988 was about 39 million bbl of oil and more than 14.1 bcf of gas.

The area's resource is estimated at 2.1-4.75 billion bbl of oil, Jie Lin, a geologist and manager of Joeco, told China Features' Zhao Qinghua.

Commercial flows have been established in 151 wells in 18 subfields, of which half have been developed. The rest are in trial production. The Chinese typically classify a collection of reservoirs and structures as one field.

The production increase in 1990 is expected to result from work on development of a new structure in and near Gaoyou Lake. Work has been in progress there since October 1988.

Joeco also is preparing to explore in more prospective southern Jiangsu Province, divided from the northern part of the province by the Yangtze River.

COMPLEX GEOLOGY

Most of Jiangsu Province is on a complicated structure called the Yangtze paraplatform, Jie told China Features. Its components are the Northern Jiangsu basin and the Southern Jiangsu uplift.

Northern Jiangsu basin has small, scattered oil traps.

Most of the deposits are in Dongtai depression, which lies in the southwest part of the basin.

About 360 traps have been found in the depression. Only 11 are larger than 2.8 sq miles.

Zhengwu, the largest developed so far, covers 3.2 sq miles and has 102.2 million bbl of oil in place at 850,000-5.6 million bbl/sq mile.

Explorationists have found the reserves by shooting closely spaced seismic lines with high resolution equipment.

WETLAND OPERATIONS

Jiangsu Province consists mostly of an alluvial plain crisscrossed with rivers and dotted with lakes.

Playing an important role in exploration is a 192 line Myriaseis remote control, amphibious seismic vehicle imported from France.

Most of the Gaoyou Lake reservoir is under the lake. A small part is in the floodway, which is submerged nearly half the year.

Air guns and telemetry stations have been imported for exploration on the water.

Multiple directional wells have been drilled from land to structures beneath the lake, and downhole pumps are used instead of sucker rod pumps.

A concentric pipeline has been laid across the lake to keep crude warm during transportation.

In spite of difficulties, Joeco believes it is possible to find another 365-730 million bbl of oil in place before 2000 in northern Jiangsu Province, says Ma Li, Joeco chief geologist.

SOUTHERN JIANGSU

Less exploration has been carried out in the 16,370 sq mile area south of the river, even though much better oil generating and trapping conditions exist, China Features' Zhao reported.

The area may contain 8.76 billion bbl of oil and 26.3 tcf of gas, Ma said. The crude is low in paraffin and nitrogen content with medium sulfur content.

On the Southern Jiangsu uplift, a 775 sq mile area has been delineated for concentrated exploration and development in 1991-95.

Cooperative exploration for and development of resources with foreign companies is permitted, said Liang Guobin, chief of Joeco's department for foreign cooperation.

Jiangsu is one of 10 southern Chinese provinces open to foreign participation in developing onshore oil resources under a policy approved by the state council nearly 5 years ago (OGJ, Apr. 8, 1985, Newsletter).

Joeco said foreign investors can own a maximum of 51 % of oil fields they discover at their own risk.

Almost 30 oil and service companies from 12 countries approached Joeco about foreign participation within about a year after it sold data packages in 1986. They included British Petroleum Co. plc, Canada Northwest Energy Ltd., Triton Energy Corp., Shell Exploration (China) Ltd., and Idemitsu Oil Development Ltd.

No exploration agreements were reported as a result of the talks.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.