China’s biggest oil producer says it has discovered a massive new offshore oil field that could become the country’s largest domestic petroleum source in a decade.
The field in the Bohai Bay, in eastern China, could hold reserves of up to 2.2 billion barrels, the official Xinhua news agency reported.
The estimated output is equivalent to 5.4 per cent of China’s total crude production in 2006, the agency quoted sources with PetroChina as saying.
The find comes amid intense exploration by China’s oil companies, looking to reduce the country’s rapidly growing dependence on foreign oil.
Such a field, if confirmed, would be a "world-scale discovery", Gavin Thompson, an oil consultant based in Beijing, told the Associated Press.
"In terms of energy security, a 2 billion barrel discovery is going to be very welcome, not only to PetroChina but to China’s energy planners."
Jiang Jiemin, vice-chairman and president of PetroChina, said it was "the largest find in China in 10 years".
The Nanpu block in Bohai Bay, partly offshore, covers an area of 1,300-1,500 sq km and is expected to produce high-value light crude, the company said.
CNOOC, another leading energy company, announced this week that it had also discovered new oil and gas fields in Bohai Bay, yielding a test output of 1,600 barrels of oil and approximately 10 million cubic feet of gas per day.
Zhu Weilin, vice-president of CNOOC, said of the discovery: "We hope to develop a large-scale cluster of oil and gas fields [there] in the future."
China, which once met its energy needs from domestic oilfields, has turned into a leading importer of fuel since the 1990s amid surging economic growth.
It is now the world’s second largest energy consumer after the US.
The country met almost half of its energy needs through imported fuel in 2006 with oil consumption rising by 9.3 per cent to 2.4 billion barrels.
Easing the pressure
Jim Brock, an industry consultant in Beijing, said while the Bohai discovery would help lessen the pressure for more imports, there would still be "significant pressure".
China, he said, would continue to be a major player in the international market.
Economists say Chinese oil demand, driven by economic growth that reached 10.7 per cent in 2006, has strained world supplies and pushed up prices.
The government is trying to improve the energy efficiency of its economy, which consumes several times more units of energy per unit of output than Japan or the US.
Although Chinese drillers have found several big gas fields, the Bohai discovery is the first major oil find since the mid-1990s.