China's state owned China National Petroleum Corp. (CNPC) has set a crude oil production target of 2.9-3 million b/d by 2000, up from the current 2.78 million b/d.
CNPC also plans to produce 1.9-2.4 bcfd of natural gas by 2000.
To achieve state targets, CNPC must identify another 18.25- 21.9 billion bbl of original oil in place (OOIP) and 10.5-17.5 tcf of original gas in place (OGIP).
CNPC's own target calls for identifying 29.2 billion bbl of OOIP and 35 tcf of OGIP.
To achieve those goals, CNPC will have to slow the decline in its eastern fields, improve discovery rates, and hike artificially low crude oil prices. More often than not, says CNPC Vice Pres. Zhou Yongkang, the three problems are interrelated.
Onshore China's postulated hydrocarbon resources are estimated at 507 billion bbl of oil and 1.04 quadrillion cu ft of gas. However, reserves recovery rates are a paltry 23.6% for oil and 3.5% for gas, CNPC's biggest concern.
Since 1986, additions to reserves have lagged production. CNPC added 846.8 million bbl of proved and probable crude oil reserves in 1994 vs. production of 1.015 billion bbl. CNPC's reserves/production ratio fell to 11.6% in 1994 from 11.9% in 1986. Lack of capital because of low crude prices has slashed drilling in China, where footage in 1994 was down 40.5% from 1985's level.
Since 1986, production at some of CNPC's eastern fields has fallen a combined 400,000 b/d, while the high water cut in those fields has helped hike production costs an average 20%/year.
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