China’s authorities have approved 1.3 billion barrels of new shale oil reserves at Sinopec’s two shale fields in eastern China, the state-run oil giant announced on Monday.
The reserves were discovered at the Xinxing field in the Jiyang trough of the Bohai Bay basin and the Qintong field in the Subei basin, according to a statement from China Petroleum & Chemical Corporation (Sinopec), reported by Reuters.
The shale oil deposits are located deep underground, ranging from 3,000 meters (9,842 feet) to 4,650 meters (15,256 feet) below the surface.
Despite significant shale oil and gas reserves, extracting these resources in China remains difficult. Shale oil production in the country currently accounts for only 1% of domestic output.
China has vast shale resources, especially natural gas, but tapping into them is challenging due to the complex geology of the country’s shale formations, which differs from the conditions in the United States.
Nevertheless, shale exploration is a key component of China’s strategy to reduce its dependence on foreign oil and gas, boosting domestic production instead.
Last year, Sinopec called for more government support for shale oil projects, particularly through favorable tax policies. Sinopec’s chairman, Ma Yongsheng, emphasized the need for the government to introduce financial backing and preferential tax measures for the shale industry.
Ma noted that while China holds considerable shale oil reserves, the complexity of their extraction due to geological constraints makes it more difficult than in the U.S.
Sinopec’s leadership also urged the government to invest more in research and development to improve drilling and extraction techniques for these challenging resources.
As Chinese energy companies increase exploration in both shale basins and traditional fields, the deeper shale deposits in China continue to pose significant extraction challenges, unlike the more accessible formations in the U.S.
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