Gas reserves grow at oilfield

The country's biggest oil producer, PetroChina, claims its flagship Daqing oilfield in Northeast China has the potential to locate another 200 billion cubic metres of natural gas reserves.

The government verified 100 billion cubic metres of natural gas reserves at the end of last year at the site.

But a PetroChina official told China Daily after a press conference in Beijing on Friday they believed there was double the amount of reserves.

"We haven't submitted the possible finds to the State, but I am sure of the new gas reserves," he said, declining to be identified.

A State expert team, set up by the Ministry of Land and Resources (MLR), confirmed in December that a natural gas field discovered by PetroChina at Daqing has reserves of 100 billion cubic metres. It made the old Daqing oilfield the country's fifth largest gas production site after the Tarim, Qaidam, Shaanxi-Gansu-Ningxia and Sichuan basins, according to industry experts.

Daqing oilfield produced 45 million tons of crude oil and 2.4 billion cubic metres of natural gas last year.

Although industry analysts have said PetroChina's oilfields in the eastern areas, including Daqing, have experienced declines in production, PetroChina President Jiang Jiemin told reporters at Friday's press conference that the annual oil production from the giant oilfield is expected to remain above 40 million tons for the next five years at least.

"We are applying new technologies in the old field, which could help increase the production efficiency by as much as 10 per cent," Jiang said.

China National Petroleum Corp (CNPC), the parent of Hong Kong-listed PetroChina, said in a statement on Friday that the company produced 105.9 million tons of crude oil last year from its domestic assets, accounting for 58 per cent of the country's total oil output.

Its domestic natural gas production, recording 36.7 billion cubic metres in 2005, increased by 28 per cent compared with the previous year.

Soaring oil prices as well as the company's robust production growth helped earn CNPC 175.6 billion yuan (US$22 billion) for the whole of 2005, an increase of about 36.3 per cent on 2004.

In its long-term blueprint, the company plans to produce 110 million tons of crude oil by 2010, and double its gas production to 71 billion cubic metres.

Overseas project expansion will be an important incentive to boost its production, the company said on Friday.

By the end of last year, CNPC had produced 40 million tons of oil and gas equivalent from its overseas fields. "We will see a substantial increase (in the overseas production) by 2010," Chen Geng, president of CNPC, said on Friday.

At the press briefing, Wang Fucheng, a senior official from CNPC, said PetroChina still has plans to float on the A-share market.

The acquisition of shares in PetroChina's three listed subsidiaries that the parent does not own paves the way for PetroChina's listing on the domestic stock market, he said. "But it is hard to predict a timetable for the listing."

In November last year, PetroChina said it was to buy back all the public shares of its three listed subsidiaries based in northeastern China Jinzhou Petrochemical, Liaohe Oilfield and Jilin Chemical for 6.15 billion yuan (US$758 million).

Source: China Daily