Shale oil is an emerging energy resource, increasingly in demand due to the global surge in energy requirements and the depletion of traditional oil reserves. On October 20th, Sinopec announced significant achievements in its Shale Oil National Demonstration Zone located in Jiyang, Shandong Province. A single well there recently recorded a peak daily production of 262.8 tons of oil, setting a new domestic record for shale oil production from a single well, with estimated resource potential reaching up to 10.5 billion tons.
The Jiyang shale oil reserves are primarily situated within Shandong Province, covering an area of 7,300 square kilometers with an average burial depth of 3,000 to 5,000 meters, and locally reaching up to 5,500 meters. This region has the deepest shale oil deposits in mainland China, characterized by high temperatures and significant pressure. Thus, the challenges in exploration and development present a series of world-class issues.
Jiao Hongyan, the manager of Sinopec’s Shale Oil Project in the Shengli Oilfield, stated, “We have deployed a set of systematic core sampling wells. Based on the study of thousands of meters of core samples, and through 150,000 laboratory experiments, we have tackled over 40 national and provincial research projects to reveal the accumulation mechanisms of Jiyang shale oil, and we have initially clarified the patterns of accumulation and high production.”
Shale oil refers to petroleum resources trapped within shale rock formations, which are characterized by thin, layered sedimentary structures. Unlike conventional oil extraction, shale oil production necessitates hydraulic fracturing of the oil-rich shale to widen fractures using water and additives to release the trapped oil.
With the increasing global demand for oil and the decline of traditional resources, the market need for shale oil is on the rise. Currently, shale oil has been discovered in 75 basins across 21 countries, with recoverable resources estimated at 7 to 8 billion tons. The United States leads the world in shale oil production, accounting for 35% of global output. China also possesses extensive shale oil reserves, located in five major basins—Ordos, Songliao, Junggar, Sichuan, and Bohai Bay—as well as in eight smaller basins, including Qaidam, Jianghan, and northern Jiangsu. China’s recoverable shale oil resources are about 3.2 billion barrels, making it the third largest in the world.
Recent technological advancements have transformed previously “unmoveable” resources into “movable” ones. Shale oil is classified as an unconventional oil and gas resource, characterized by low permeability and poor flow characteristics, making extraction very challenging. However, through continuous technological breakthroughs and upgrades, China has made remarkable strides in shale oil production.
Currently, three national shale oil demonstration zones have been established, including the Jimsar National Shale Oil Demonstration Zone in Xinjiang, the Daqing Gu Long Shale Oil Demonstration Zone, and the Shengli Jiyang Shale Oil Demonstration Zone. The Jiyang Shale Oil National Demonstration Zone is China’s first continental graben lake basin shale oil demonstration zone. Researchers have enhanced their understanding of shale oil enrichment patterns and development mechanisms while effectively tackling the world-class challenges of high temperature, high pressure, and leakages.
Gao Guoqiang, a senior expert at Sinopec Group, remarked on the significant breakthroughs made by scientists in the Shengli Oilfield, who have transformed 90% of previously unreachable resources into accessible ones, greatly enhancing the productivity of individual wells.
Zhang Shiming, director of the Exploration and Development Research Institute of the Shengli Oilfield, added, “In the last decade, China’s unconventional oil and gas extraction has witnessed significant progress, complete with a robust exploration and development technology system that contributes to ensuring national energy security.”
