BEIJING - For the
entire history of the Chinese oil industry,
eastern fields have been the main contributors to
production, while the northwest Xinjiang Uygur
Autonomous Region, with its rich reserves, took
the role of a strategic substitutive zone.
But nowadays, there are signs that the
country is shifting its main focus of oil and gas
resource development westward, as marked by
capital flows in the energy field and remarks of
senior officials. Together, these developments
imply that the position of Xinjiang as a
substitutive zone is gradually shifting to that of
a main contributor to the country's energy supply.
Recently, Xinjiang has
become the focus of attention
by the government and oil enterprises, as the
country now depends on imports for 45% of its oil
supply, and it has become increasingly urgent to
speed up the development of domestic oil and gas
resources.
In late June, Vice-Premier Zeng
Peiyan and officials from the State Development
and Reform Commission, the Ministry of Land and
Resources, and China's top oil giants China
National Petroleum Corporation (CNPC) and China
Petrochemical Corporation (Sinopec), attended a
seminar in Xinjiang on the oil and gas development
situation in Tarim, Xinjiang. They all held that
the time is now ripe and the conditions are
basically ready to speed up energy construction in
Xinjiang, saying that Xinjiang should be built
into a strategic base of oil and gas resources in
the coming few years so as to narrow the country's
oil and gas shortfall. Xinjiang's Tarim, Junggar
and Turpan-Hami basins are home to 20.9 billion
tons of oil resources and 10.85 trillion cubic
meters of natural gas, respectively accounting for
25.5% of China's inland oil resources and 27.9% of
the country's inland gas resources.
In
2004, Xinjiang produced 22.60 million tons of
crude oil. Related sales and profits hit 40.5
billion yuan (US$5 billion) and 19.5 billion yuan
respectively. All three figures were record highs.
Since 1990, the oil output in Xinjiang has been
increasing by 1.11 million tons annually on
average. According to the preliminary plans of
CNPC and Sinopec, the region's oil and natural gas
output will hit 30 million tons and 18 billion
cubic meters, respectively, by 2010. Combined with
the 20 million tons of crude oil imported from
Kazahkstan via pipelines, Xinjiang will become the
country's largest oil and gas supply base by then.
The Tarim Basin is estimated to have 10.7
billion tons of oil reserves and 8.39 trillion
cubic meters of natural gas reserves. At present,
the verified rate is only 8% for oil and less than
10% for natural gas. Tarim's crude output will top
10 million tons in 2005.
Earlier, CNPC and
Sinopec announced that they would invest 20.85
billion yuan this year in upstream oil and gas
prospecting and exploration in Xinjiang. Aside
from acceleration in oil and gas prospecting and
exploration, China is also speeding up the
construction of facilities for transmitting oil
and gas from Xinjiang to other parts of the
country.
'Thick oil' fields coming on
line Xinjiang has acquired an annual thick
oil production capacity of 3.2 million tons to
become a major thick oil production and processing
base in China.
"Thick oil" refers to
high-viscosity, large-molecule petroleum which is
a solid at room temperature; while commercially
usable, this grade of oil requires special
techniques to extract and refine. China is rich in
thick oil reserves. The Junggar Basin boasts an
estimated 900 million tons of thick oil reserves,
with 250 million tons already proven. At the
current production level, the thick oil reserves
at Junggar are enough to be mined for at least 30
years.
PetroChina's Xinjiang Oilfield
produces 3 million tons of thick oil annually,
making up one third of the total output in China.
This is processed by Karamay Petrochemical, Urumqi
Petrochemical, and Dushanzi Petrochemical, with a
total throughput of about 2.3 million tons, and by
Lanzhou Petrochemical, which produces 700,000
tons.
A thick oil processing station was
completed in June at Lunsan in the Tarim Oilfield
in the southern part of the Xinjiang Uygur
Autonomous Region, making it possible for the
oilfield to extract thick oil by blending it with
thin oil. The station integrates oil and gas
treatment, fire control and wastewater treatment
and is capable of handling 200,000 tons of thick
oil a year.
