BEIJING (Dow Jones Newswires), Jan. 27, 2011
China Petroleum & Chemical Corp., or Sinopec Corp., said Thursday that its subsidiary Sinopec Shengli Oilfield has signed an agreement with Hess to conduct a joint study on tight oil reserves and other unconventional oil and gas resources at Shengli oil field in the Bohai Bay area.
Oil which is trapped in rock with low permeability is expected to account for more than 60% of fresh crude reserves additions at Shengli in five years, it said, which could make more oil available at Sinopec's largest field as it faces declining conventional reserves.
Shengli, which is also China's second-largest oil field, produced 27.34 million metric tons or 550,000 barrels a day of crude last year, down 2% from 2009, Sinopec Shengli Oilfield said in a statement, adding it plans to maintain annual crude output at more than 27 million tons over the next five years.
Some analysts believe Shengli is near depletion after 45 years of production, but Sinopec said that it has been using advanced technology to maintain output.
"To efficiently develop tight oil reserves needs higher-efficiency technology, and (we) need to seek international cooperation to introduce new technology and advanced concepts," the company said.
New York-based Hess Corp. wants to take advantage of its experience in developing the Bakken Shale in North Dakota to gain access to China's tightly controlled onshore exploration and development sector. The Bakken play has been the most successful source of oil from a shale formation in the U.S.
Sinopec Corp. is the listed unit of China Petrochemical Corp., China's second-largest oil producer by output.
Hess Corp. last year reached agreement with PetroChina to jointly explore shale oil resources at the flagship Daqing oilfield.
Copyright (c) 2011 Dow Jones & Company, Inc.
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