A game-changing discovery has been made in China with the successful completion and production of terrestrial shale reservoirs, which have maintained a natural flow for more than 260 days. This success ushers in a new era for China’s successful development of its complicated, deep, lacustrine-origin shales.
As of Feb. 27, two horizontal wells, the Guandong-1701H and Guandong-1702H wells have produced shale oil for more than 260 days by natural flow from the continental shale formation of the second member of the Paleogene Kongdian Formation in the Guandong area in the eastern Bohai Bay Basin, eastern China, with a stable daily oil production of 145 barrels and 220 barrels, respectively, and a cumulative oil production of more than 73,500 barrels. The shale oil production in the Guandong area with an estimated reserve of more than 735 million barrels marks the start of the commercial development of continental shale oil by PetroChina in the Bohai Bay Basin.
The Dagang Oilfield Company is a regional oil exploration and development subsidiary of China National Petroleum Corporation, with oil and gas exploration and development dating back to 1964. According to the IEA forecast, China has abundant shale oil, with recoverable resources of about 35 billion barrels, and ranks third in the world after Russia and the United States. Shale oil in China is mainly distributed in large lacustrine sedimentary basins such as the Bohai Bay Basin, Songliao Basin, Ordos Basin and Junggar Basin.
In 2013, Well Guandong-6X1 in the Bohai Bay Basin tapped the first commercial oil flow from shales. Soon after, the Dagang Oilfield Company stepped up its shale oil exploration and deployed 15 vertical wells consecutively, all of which yielded commercial oil flows.
Shale Research Team
The shale oil research team led by Zhao Xianzheng of the Dagang Oilfield Company defined major continental shale oil exploration and development areas. The organic-rich fine-grained shales of the Kong 2 Member in three key wells were systematically cored. A 500-meter interval of the Kong 2 Member in Well Kong 108-8 was cored continuously. The cores were characterized elaborately down to centimeter scale. More than 10,000 core samples were analyzed and a large database was built, laying a solid fondation for geological study and technological innovation.
Based on their research, the team proposed a new continental shale oil enrichment model of “dominant fabric facies control and surpassing effect of retained hydrocarbons.” The group has developed three patented technologies in China and in the United States, including fine-grained sedimentary rock identification and sweet-spot prediction methods, and 16 supporting techniques for stimulating shale oil reservoirs that have no natural deliverability. By implementing management procedures such as integrated exploration and development, integration of subsurface geology and surface engineering facilities, and adopting an automated platform operation to reduce cost, shale oil exploration and development has been improved significantly, with the entire industry chain of shale oil exploration and development being brought to a higher level in China.
The commercial production of continental shale oil in the Bohai Bay Basin in eastern China has been awarded the “First Prize of Important Discovery of Oil and Gas Exploration in 2018” by CNPC, and the achievement has been listed as the “Top Ten Scientific and Technological Progress” of CNPC in 2018.
To share the important lessons learned, along with new technologies and techniques, the AAPG, China University of Petroleum - Qingdao, PetroChina, and Dagang Oilfield will host a Geoscience Technology Conference to be held in the Dagang Oilfield, Tianjin in November 2019.