China National Petroleum Corp.’s (CNPC) foreign production sharing partners have significantly increased their output, exceeding 10 million tonnes of oil equivalent (200,000 boepd) in 2018.
Gas production accounted for the majority of the increase. Of last year’s total output, oil accounted for 2.4 million tonnes (48,000 bpd) and gas contributed 9.6 bcm (169,000 boepd). Royal Dutch Shell, Total and Chevron are the three leading foreign gas developers in China.
At Changbei tight gas field in Ordos Basin, Shell is producing 3.5 bcm per year of tight gas and the company has made a final investment decision (FID) on the second phase of development, which will add 2.4 bcm per year gas at its peak. The 1,588-square km Changbei field, where commercial operations started in 2007, is now producing from about 50 wells.
Total is producing tight gas from the Sulige field, also in Ordos Basin, while Chevron has boosted sour gas production from the Chuandongbei field in Sichuan Basin. Industry sources have said Chevron produced 2 bcm of sour gas from Chuandongbei in 2018.
At the shallow-water Zhaodong oilfield in the Bohai Bay, Roc Oil Co. (ROC) has extended its petroleum contract with CNPC. The two have agreed to extend the PSC from September until April 2023, with ROC holding a 24.5% working interest in the block while CNPC will own the remainder.
The companies have agreed to drill 24 wells at the block, which lies in less than 50 metres of water, within two years from when the agreement is finalised. Three new wells recently brought onstream are now producing 1,500 bpd of oil.
Foreign companies are eyeing the long-term benefits of being involved in helping China meet its energy demands, despite limited access to conventional onshore plays. Sources have said Malaysia’s state-owned Petronas may be considering swapping some of its overseas gas assets to gain access to CNPC’s onshore oil assets in China.