Major shale oil base achieves annual output of over 1M tonnes

The output of China's first national-level shale oil demonstration zone, located in Xinjiang Uygur Autonomous Region, has exceeded 1 million tonnes so far this year, marking a significant breakthrough in the country's shale oil exploitation, China National Petroleum Corporation (CNPC) announced Tuesday.

A total of 306 wells have been built in the Jimsar national-level shale oil demonstration zone in the Junggar Basin of Xinjiang since it was established four years ago. It is jointly developed by Xinjiang Oilfield and Tuha Oilfield, two subsidiaries of PetroChina under the CNPC.

The number of new shale oil wells coming on stream this year has doubled compared with 2023, according to Chen Yiwei, a geological engineer of the Xinjiang Oilfield.

Shale oil mainly refers to liquid hydrocarbons that are trapped in formations of shale rock that can be extracted for refining. It is often found in organic-rich shale and thin interlayers of carbonate rocks, sandstones and siltstones.

"Compared with the shale oil reserves in North America, those in the Jimsar zone are buried deeper, have a smaller continuous distribution area, lower maturity and higher clay content, making its development extremely challenging," said Chen.

"In the face of complex geological conditions and technical challenges, we achieved this milestone through technological innovation. This sets a new benchmark for the efficient development of shale oil demonstration zones," said the engineer.

Lu Linmao, another engineer, said that the oil recovery rate from quality reservoirs in the demonstration zone has improved from 44 percent to 85 percent, with reduced extraction costs.

Experts have also innovated the techniques of waste disposal and recycling to protect the local environment, Lu added.

China has established three national-level shale oil demonstration zones in Xinjiang, Heilongjiang Province and Shandong Province.

According to CNPC's plan, the Jimsar zone is set to reach an annual shale oil production of 1.7 million tonnes by 2025, with Xinjiang Oilfield accounting for 1.4 million tonnes and Tuha Oilfield producing 300,000 tonnes.

The recoverable shale oil reserves in China, one of the world's major crude oil consumers, ranks third globally.

Data from China's National Energy Administration shows that the country's crude oil output reached 208 million tonnes in 2023, while shale oil production surpassed a record-high 4 million tonnes.