China's Offshore Oil & Gas Resources Remain to be Tapped

China's offshore oil and gas reserves promise great potential.

According to the preliminary results of the third oil resources evaluation, China's oil reserves have reached 107.27 billion tons, with proven reserves reaching 22.56 billion tons, accounting for 39 percent of the total, of which offshore oil was 24. 6 billion tons, accounting for 22.9 percent of the proven reserves. The natural gas reserves have reached 54.54 trillion cubic meters, of which offshore natural gas reserves have reached 15.79 trillion cubic meters.

The average rate of proven oil resources is 38.9 percent, and that of proven offshore oil resources is only 12.3 percent, far lower than the world average of 73 percent. The average rate of proven oil gas reserves is 23 percent, and that of proved offshore natural gas reserves is 10.9 percent as against the world average of about 60.5 percent.

At present, China's net recoverable offshore oil has reached 180 million tons, enough to enable offshore oil and gas to increase at an average annual rate of 20 percent in the next five years.

Bohai, China's continental sea with an average depth of 15 meters, is a good strategic reserves area. The South China Sea, occupying 3/4 China's territorial seas, has great potential.

China's offshore oil and gas was only 90,000 tons oil- gas equivalent 20 years ago, but up to 2000, it topped 20 million tons of oil-gas equivalent, averaging an annual growth of 17.83 percent (with 1995 figure as the base), far higher than the onshore oil and gas output growth of 0.9 percent. The proportion of offshore oil output in the national total increased from 1.05 percent in 1990 to 14.4 percent in 2003. In addition, the proportion of offshore gas output in the national total increased from 2.1 percent in 1995 to 12. 8 percent in 2003. The output of offshore oil is estimated to reach 50 million tons by 2015, 26 percent of the national total; the output of offshore gas is expected to reach 25 billion cubic meters, 25 percent of the national total. At present, the output of offshore oil and gas occupies 29.7 percent of China's import volume of crude oil. This output is expected to reach 50 million tons by 2005, 42 percent of the import volume (120 million tons).

Most of China's offshore oil fields have been developed with oversea capital, costing 3 to 5 times of onshore oil field. However, as the international oil price staying high, the exploitation has great value.

East China coastal areas, with more developed economy, is close to the offshore gas fields. That is a great potential market for offshore gas. Moreover, the distance between coastal cities and offshore gas fields cut the cost of transportation.

In one word, China's offshore oil and gas are enough to sustain the fast development of the economy.