China has found massive shale oil reserves in its northern Tianjin municipality, Chinese news agency Xinhua reported on Friday.
Two wells at a field have been flowing for more than 260 days, according to Dagang Oilfield, a subsidiary of state-owned China National Petroleum Corporation (CNPC).
The newly found shale reserves will help boost China’s national energy security and economic development, Xinhua quoted CNPC as saying.
According to EIA estimates, China ranks third in the world in terms of technically recoverable shale oil resources, behind Russia and the United States.
Over the past year, China’s biggest energy producers have started to tap more tight oil and gas wells, aiming to increase domestic oil and natural gas production at the world’s largest crude oil importer.
A PetroChina test oil well at a shale field in western China could finally mean a strong commercial potential for shale oil for the first time in the world’s top crude importer, Morgan Stanley said last month.
PetroChina achieved a daily production rate of 100 tons of oil, or 733 barrels, from the Jimsar oil field in the western Xinjiang province, which suggests that shale drilling could finally have a true commercial potential in China, Morgan Stanley said in a note.
“We believe the Jimsar shale oil discovery is likely to trigger China’s shale oil revolution,” Morgan Stanley analyst Andy Meng wrote in the report.
The shale boom in China, however, would be just a fraction of the U.S. shale revolution—Morgan Stanley expects Chinese shale oil production could be 100,000 bpd-200,000 bpd by 2025, which is nothing compared to the millions of barrels of oil pumped in the U.S. every day.
According to EIA estimates, the seven key shale regions in the U.S. produced 8.314 million bpd of oil in February, and an 84,000-bpd increase is expected for March, with the Permian crossing the 4-million-bpd mark for the first time ever.