Junggar Basin Reaches Target Production of 10 Million Tons

On December 22, 2002, PetroChina Xinjiang Oil, a subsidiary company of PetroChina Company Limited, located in Junggar Basin, has realized its annual crude oil production target of 10 million tons. This signaled the birth of the first ten million-ton oilfield in west China, a historical breakthrough.

When the first oil gushed from the Karamay Well 1# on October 29, 1955, Karamay became the first large oilfield in the new China. China has since got rid of its name of an oil-poor country. After more than half a century's efforts by generations of oil workers, a series of significant results have yielded in the exploration and development of Junggar Basin. So far, the accumulated proven oil geographical reserves are 1.76 billion tons, and natural gas reserves are 62.93 billion cubic meters. More than 20 oilfields have been developed and constructed, including Baikouquan, Cainan, Shixi, Hutubi and Luliang. The crude oil production in the region has been raked No.4 among onshore oilfields in 13 consecutive years and the company accomplished a sustained growth for 23 consecutive years.

The important discovery in exploration is the key factor to drive the development of oil industry to the upper level. It is critical both to increase the pace of oil production and to maintain a virtuous circle in the exploration and development, and it is of the biggest economic interest. After entering the new century, PetroChina Xinjiang Oil always puts the exploration of oil and gas on the first place. It formulated a guideline of "focusing on pre-exploration, discovery and select good ones to verify while stressing returns," and makes plans on three levels of strategic development, strategic breakthrough and strategic preparation. Through scientific decision-making and careful organization, the company adopts extensively new exploring technologies and constantly expands results in exploration, maintains a reasonable series of reserves, and realized a virtuous circle in the exploration and development of oil and gas. Since 2000, the oilfield has made considerable strategic breakthroughs in Luliang, Kayindike, Mosuowan and other areas: on July 13, 2000, Well Lu 9 discovered gas in the Cretaceous layer; on July 28, Well Ka 6 discovered hydrocarbons, realizing the dreams of finding oil in the south fringe of Junggar Basin. On August 31, 2001 Well Pen 5 marked the discovery of the Mosuowan oil and gas field. In November 2002, Well Cai 43, Well Shinan 24 and Well Mo 7 were all big discoveries and initially demonstrated an estimated reserve potential from the two oilfields of hundred million tons, which laid a solid foundation for Xinjiang Oil to gear up its "trilogy".

On December 22, Xinjiang Oil exceeded its annual output of over 10 million tons. It is estimated by the end of this year, the output of crude oil will reach 10.1 million tons and the natural gas output will reach 2 billion cubic meters. It is regarded as an important milestone for PetroChina Xinjiang Oil to reach the annual output of 10 million tons, also the first phase of the "trilogy" of the oil field. The second phase is to produce 12 million tons of crude oil and 3 billion cubic meters of natural gas annually by 2005, while producing 15 million tons of crude oil and 5 billion cubic meters of natural gas by 2010 for the third phase.

Xinjiang Oil has realized a historical great leap from the first oilfield of new China into the first oilfield with an output of 10 million tons crude oil in west China. It has now become the largest petroleum and petrochemical base in the west.