Shale oil output hits 1m tons at Daqing

The annual production of Gulong shale oilfield in Daqing, Heilongjiang province, has exceeded 1 million metric tons, Daqing Oilfield Co, a subordinate of China National Petroleum Corp, announced on Friday.

"After five years of exploration and development, Daqing Oilfield has developed five key technologies, establishing itself as a pioneering center for original shale oil technology," said Zhu Guowen, executive director of Daqing Oilfield Co. "Relying on national key laboratories, we have built an open, high-level research platform, achieving continuous increases year after year."

"It is expected that production will exceed 1.08 million tons by the end of the year," he added.

Covering an area of 2,778 square kilometers, the National Demonstration Zone of Gulong Shale Oil in Daqing was approved by the National Energy Administration in August 2021, with predicted geological reserves of about 1.27 billion tons.

Shale oil, one of the unconventional oils produced from oil shale rock fragments, is widely distributed in China.

"The resource volume of shale oil surpasses that of conventional oil and gas, making it an important strategic resource for increasing reserves and production," said Sun Longde, an academician at the Chinese Academy of Engineering. "The development of shale oil holds great promise for ensuring national energy security."

"Conventional oil is stored in porous sandstone, and extraction is like squeezing water from fresh tofu. However, shale is dense like an iron plate, lacking natural pore channels, making shale oil extraction akin to squeezing water from a cement block," said Dai Xiaodong, deputy commander of Daqing Oilfield Shale Oil Exploration and Development Command.

The shale layers are as smooth and flat as a blackboard, with extremely fine surfaces, but when viewed perpendicular to the layers, the rock is easily split into sheets, Dai said.

It has been certified that there are 158 million tons of proven reserves in the zone, and this certification has been approved by the Ministry of Natural Resources, said Bai Xuefeng, deputy general manager and chief geologist of Daqing Oilfield, adding that this provides "critical support for breakthroughs in China's continental shale oil development".

"It is expected to achieve an annual production of 3 million tons by the end of the 15th Five-Year Plan (2026-30)," said Bai.

Since the initial oil discovery at the Guyeyouping 1 well in 2020, the Daqing Oilfield has witnessed significant progress in shale oil production.

Key exploratory wells such as Guyeyouping 1, Yingye 1H and Guye 2HC achieved high production in 2021, with annual shale oil output reaching 15,000 tons.

In 2022, five pilot test well groups were designed and developed, with all horizontal wells successfully drilled and fracturing technology upgraded.

By 2023, the expanded development test area at Guye 8H1 achieved increases in reserves and production, with all 54 wells put into operation, achieving annual shale oil production of 171,000 tons.

In 2024, the oilfield set multiple records, with the highest single-well daily oil production of 102.0 cubic meters and a daily oil and gas equivalent of 102.8 tons.

Meanwhile, the oilfield has successfully established a standard system for shale oil, released four industry standards and achieved numerous intellectual property outcomes, including 44 national invention patents and five software copyrights. "We have achieved profitable development of shale oil with the largest resource volume and greatest development difficulty, taking a crucial step in the field of unconventional oil and gas," said Bai. "It has not only achieved a dual breakthrough in exploration and development theory and core key technologies of continental shale oil, but also provides valuable experience for the development of similar types of shale oil."