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Viable oil, gas reserves 'need to be discovered'

By Wang Yu and Li Fangchao (China Daily)
Updated: 2007-03-30 06:42

China needs to strengthen oil exploration efforts to ensure energy safety, said a statement by the Ministry of Land and Resources.

A ministry survey indicated that China had 2.043 billion tons of oil and 2.449 trillion cubic meters of gas in economically recoverable reserves at the end of last year.

Economically recoverable reserves mean oil and gas that can be extracted profitably under current economic and market conditions and extraction technology which usually account for a small part of the total reserves.

The remaining are an important index of profit potential in the future.

The statement said that the ministry arrived at the figures after factoring in data from oil fields owned by domestic giants such as PetroChina, Sinopec and China National Offshore Oil Corp and other local oil and gas companies.

Last year, China discovered oil reserves of 949 million tons and gas reserves of 581.6 billion cubic meters, it said.

They include 172 million tons of oil and more than 293 billion cubic meters of gas in economically recoverable reserves.

"The economically recoverable oil reserves are similar to what the International Energy Agency has estimated.

"However, recoverable natural gas reserves, which are commercially profitable to extract, are much larger than that previously estimated by the international body. This is a result of intense efforts to explore and develop natural gas as a clean energy option," Han Xuegong, a senior consultant with China National Petroleum Corporation, (CNPC), told China Daily.

He stressed that given the gap between China's soaring energy demand and supply of oil and gas, national energy powerhouses have to strengthen their exploration efforts to locate more economically recoverable reserves.

Han said the amount of reserves announced by the ministry are conservative figures without including the latest discoveries.

CNPC's listed arm PetroChina, China's top oil producer, estimates the reserves of the oilfield it has recently discovered in Bohai Bay at 2.2 billion barrels, according to Xinhua News Agency.

According to the ministry, the daily output of the new oilfield, which is located at the Nanpu block of PetroChina's Jidong Oilfield at Bohai Bay, will likely reach 200,000 barrels in three years. The newly found oilfield is believed to be China's largest discovery over the past decade.

(China Daily 03/30/2007 page4)



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