Sinopec: Sinopec Exploits Shale Oil in Shengli Oilfield with Estimated Reserves of 458 Million Tons

The four designated shale oil prospecting wells in the East Exploratory Area of Shengli Oilfield of China Petroleum & Chemical Corporation (HKG: 0386, “Sinopec”) reported high oil flow on November 3, among which the Fanye-1 Well achieved peak daily oil production of 171 tons, setting the highest shale oil production record of a single well in China.

A strategic breakthrough in shale oil exploration in Shengli Oilfield, the record-breaking achievement has exhibited the area’s bright prospects for shale oil exploration and development. Shengli Oilfield has reported the first batch of shale oil geological reserves to reach 458 million tons by current predictions. Preliminary estimates have shown that shale oil resources in the region amount to more than 4 billion tons marking a practically new territory for increasing reserves and production in eastern China.

Shale oil is the petroleum resource stored in the micro/nano-sized pores of shale layers. The shale oil developed in Shengli Oilfield is at a depth of over 3,000 meters at a temperature reaching 170 degrees Celsius in a storage space that’s finer than a hair. The low degree of geological evolution, high density, poor fluidity and difficult development scenario have challenged techniques including drilling and fracturing.

To solve problems in shale oil exploration and development, Shengli Oilfield has innovated three major technologies to break through the bottlenecks. It has carried out more than 40 types of shale oil research at various levels, including the National Basic Research Program of China (973 Program) and major special projects, in the past decade such as:

• Establishing a shale oil accumulation and enrichment model in continental faulted basins to develop shale oil optimization evaluation technology that uncovers the “hiding places” of shale oil;

• Developing high-quality fast drilling technology with synthetic-based drilling fluids to enable efficient drilling of horizontal wells of over 2,000 meters at depths below 3,300 meters;

• Accomplishing multi-scale combined network fracturing technology that allows shale oil to discharge on hundreds of artificially manufactured millimeter-level “highways”.

At the moment, Shengli Oilfield is fully equipped for the comprehensive exploration and development of shale oil. The company is working on technologies for longer horizontal sections, multi-layer and three-dimensional development, innovatively applying the “well factory” model to speed up the establishment of a national-level shale oil development pioneering zone in the Jiyang continental fault basin.

“The next step for Sinopec Shengli Oilfield is to continue conducting in-depth research and improving engineering capabilities to support the increase of large-scale shale oil reserve and production. It’s expected shale oil production capacity reaching 1 million tons will be built in the next five years, consolidating production yield and energy security resilience in China,” noted Kong Fanqun, Assistant to the President of Sinopec and Executive Director of Sinopec Shengli Oilfield.

Sinopec has also reported major breakthroughs in the field of shale gas exploration, including the establishment of China’s first large-scale shale gas field, the Fuling shale gas field; the discovery of China’s first deep shale gas field, the Weirong shale gas field, the first phase of which has built a production capacity of 1 billion cubic meters in 2020; as well as the Dongye Deep 2 key shale gas prospecting well in Sichuan Basin that has been tested to produce 412,000 cubic meters of high-quality shale gas daily and marked significant achievement in the exploration of ultradeep shale gas at a depth of over 4,000 meters.