Jilin oil field, a unit of PetroChina, aims to nearly double natural gas output by 2015 but expects a modest 5 per cent growth in crude oil production in the same period, its general manager said.
Jilin, an operator of small, marginal fields in China’s northeast, plans to pump more than 3 billion cubic metres (bcm) of gas in 2015 versus this year’s target of 1.6 bcm, Hou Qijun said on the sidelines of China’s annual parliament meeting.
“We are still at an early stage of gas exploration... Northeast China is short of gas. Residential use of gas remains low, gas demand from the commercial and industrial sectors is under-supplied. The power sector has huge potential,” Hou told reporters.
Jilin’s emphasis on gas is in line with parent company PetroChina’s overall strategy to greatly increase gas exploration and production, to make gas account for half of the company’s total oil and gas production by 2020.
“Within 8-10 years, PetroChina has set the goal to produce 130-140 bcm gas, or equivalent to its oil production of about 110 million tones,” said Hou, a geologist by training and former head of exploration at China’s flagship oil field Daqing.
Like other mature oil fields in China’s east, Jilin expects a much slower pace of growth in crude production at its fields, which typically have lower-than-average output per well.
Jilin wants to raise its crude output to exceed 7 million tonnes in 2015, up from last year’s 6.05 million tonnes and an estimated 6.65 million tonnes this year, and hopes to maintain the 7 million tonne level for another decade.
It missed its 2009 target as it was forced to shut in about 1,000 low-yielding wells early last year because the global financial crisis cut into Chinese fuel demand.
PetroChina, which reported a 3.7 per cent fall in total crude output in the first nine months last year, also closed wells at other fields like Yumen in the northwest and Liaohe in the northeast, Hou said, adding that Jilin restarted its wells around April when demand started to recover. Hou, a member of the Chinese parliament, has proposed that the government should levy a lower resource tax on marginal oil fields like Jilin than on reserves that are much easier to develop.
