Oil Giants Formulate Ambitious Plans for Shale Gas

OIL FOCUSOil giants formulateAmbitious plansfor shale gasWei Haifeng(Petroleum Exploration and Production Research Institute of SINOPECChina will intensify its efforts to explore for shale gas two blocks were then awarded to Sinopec and a local coal-help restructure the country's energy supplies and fuel bed methane company. Sinopec said it began workingits economic growth, according to the Ministry of Land with Chevron Corp. in December to conduct seismicand Resources. The ministry's latest survey shows that surveys on a block in Guizhou Provincethe country has 25.08 trillion cubic meters of explorable Chinas search for shale gas has led to more than 60shale gas reserves(excluding Qinghai and Tibet). More wells being drilled, of which eight were drilled by thethan 420 researchers from oil companies, colleges and ministry for testing purposes. Zhang Dawei, deputygeological exploration agencies and research institutions director of oil and gas research at the ministry, said heparticipated in the surveyoptimistic about the prospects for recovering the gas. HeShale gas resources are widely dispersed over the said shale gas is predicted to make up a third of the 300country, such as in Sichuan Basin, Ordos Basin, Tarim billion cubic meters of natural gas the country is expectedBasin, the western Hubei-Eastern Chongqing area, and the to retrieve in 2020. One of the main goals in retrievingprovinces of Guizhou and Hunan. "China is facing tight such gas is to find more sources of clean power for Chinagas supply on booming demand. If the country's shale which gets more than 70 percent of its energy from coalgas output exceeds 100 billion cubic meters by 2020, the Sichuan, Hubei, Hunan, Guizhou and Shaanxi provinces,fuel will become an important source of China's energy as well as the Xinjiang Uygur Autonomous Region andsupply, " an experts from the ministry said, calling for Chongqing, will be the main contributors to the increasebreakthroughs and innovations in exploration technologies in shale gas output. The ministry said 180 areas stretchingto catch up with developed countries. Shale gas, a clean 1. 1 million square kilometers have been selected as theand high-efficiency energy resource, is produced from main places where exploration for shale gas will takeshale through a complicated process called hydraulic place. For many of those places, licenses have alreadyfracturing. The government has strengthened the survey been granted forand appraisal of shale gas in recent months to speed up Shale gas has become an important stake forthe development of the industryPetroChina. For example, the company has allocated aChina planned to hold its second auction of exploration special fund to launch a project for "pilot experiment onrights for shale gas in March 2012 to accelerate its search shale gas appraisal and development in Sichuan Basin.or the unconventional energy source. The Ministry The project is operated by Petro China Southwest Oilof Land and Resources plans to open 25 blocks for Field Company. Three shale gas wells are already put intexploration in 10 provinces and regions, said Yu Haifeng, production and中国煤化工cubic metersdeputy director of the ministry's land-survey department. of gas for the maCN MHGear. Wej-201In last June, China held its first auction of exploration located in Weiyuan County, Sichuan Province, is China'srights in areas rich in shale gas. The exploration rights to first vertical shale gas production well, which started toCHINA OIL GAS 13No.1,2012UIL HUCUSproduce gas on November 9, 2010. Wei-201-Hl, about spans Guizhou Province and Chongqing Municipality. It2000 meters from Wei-201, is the first horizontal shale gas has finished drilling three shale-gas wells so far and iswell drilled in the country, which was put into production drilling another seven, including some in the Nanchuanon August 1, 2011. Wei-201-H3 was on the stream early block. " It's impossible for the company to achievein 2012. Important research results have been achieved large-scale production of unconventional energy thisfrom the three shale gas wells in terms of shale mechanic year. we hope to establish the capacity to produceharacteristics, optimized selection of exploration targets, about 500 million to 1 billion cubic meters as early asrapid drilling, and fracturing of reservoir body. PetroChina 2014, "Bao said, Sinopec owns three shale-gas blocksSouthwest oilfield Company will accelerate its efforts for that cover 17,000 square kilometers, in addition toexploration and development of shale gasblocks overlapping with its oil and conventional gasChina Petrochemical Corporation, plans to increase its blocks. China, which depends heavily on imported oilshale gas output to at least 2 billion cubic meters a year to support its economic expansion, aims to tap into theby the end of 2015, which would account for about one- shale-gas sector to achieve its goals in energy security andthird of the country's targeted production by then. The carbon emissions curbsalso known as Sinopec Group, will invest more Based on the reports from news media, most ofthan I billion yuan(US$158 million) in the shale gas Sinopec's current technology is imported and thatand oil sector this year, compared with about 600 million foreign partners are providing support for explorationyuan in 2011, said Bao Shujing, deputy manager of the and drilling. Sinopec completed its joint environmentalUnconventional Energy Technology Support Department research with Exxon Mobil Corp in the meigu blockof Sinopec's Petroleum Exploration and Development in Sichuan Province last year. At present, the companyResearch Instituteis working with BP Plc in Guizhous Kaili deposit andSinopec won the rights during China's first shale-gas Chevron Corp in Guizhou's Longli field to carry out riskauction last July to explore the Nanchuan block, which assessments. seWell Jiangyang 101, the first shale gas well cooperated by CNPC and Shell, stYH中国煤化工CN Ghat the shale gasooperative development project in Sichuan Fushun block entered into a new stageCHINA OIL GAS2012