AsianOil: CNOOC reports commercial flows from offshore shale well
China National Offshore Oil Corp. (CNOOC) has achieved commercial flows of oil and gas from an offshore shale well in the South China Sea. This marks the first successful offshore shale well for China.
According to a July 28 statement reported by Chinese media, CNOOC achieved production of 20 cubic metres (126 barrels) per day of oil and 1,589 cubic metres per day of natural gas from the Weiye-1 well during testing. The well is located in the south-western trough of the Beibu Gulf Basin – an area the company had been targeted in the hope of achieving an offshore shale breakthrough. CNOOC said the basin could hold around 1.2bn tonnes (8.8bn barrels) of prospective tight oil resources.
The state-owned company intends to treat the Weiye-1 well as a new starting point for developing an offshore shale demonstration project.
The discovery comes as Chinese state-owned companies step up efforts to tap shale deposits in response to Beijing’s calls to boost domestic energy production and improve security of supply. Such efforts are being made despite the fact that shale reserves tend to be more costly and challenging to develop.
Shale development has been underway in China for some time, but the country was still only producing only around 35,000 barrels per day (bpd) of tight oil – equivalent to less than 1% of its total crude output – as of late 2021. Most of its tight oil output comes from the onshore Ordos and Jungar basins.