China’s Oil Resource Reserve Maintains Favorable Growth

China’s oil resource reserve maintains favorable growth

BEIJING, Nov. 10 (Xinhua) — China’s oil resource reserve maintains a favorable growth despite the fact that it has entered a stage of low growth, said a researcher with the Ministry of Land Resources (MLR) on Thursday.

Zhang Xin’an, vice director and researcher of the Global Resources Strategy Open Lab under the Information Center of the MLR, said at the 2005 China Petroleum held here, that mainly thanks to the intensified oil exploration activities in recent years, China is seeing its oil resource reserve maintain a favorable growth.

According to Zhang, by the end of 2004, accumulated established oil in place reserve of the country, including crude oil and condensate oil, is 24.844 billion tons, up 5.4 percent than that at the end of the previous year; accumulated established recoverable oil reserve is 6.791 billion tons, up 3.4 percent; remaining recoverable oil reserve is 2.491 billion tons, up 2.4 percent.

Zhang said that China’s oil reserve replacement, an index referring to the ratio between newly-added established recoverable reserve and extracted reserve of the year, maintains at a reasonable level.

Since 1993, oil reserve replacement of China has maintained at around 1.0, even reaching 1.27 in 2004 owing to successful explorations.

Moreover, China’s oil reserve to production ratio also maintains at a reasonable level, said Zhang.

According to him, since 1993 when China became a net oil importer, the reserve to production ratio, representing the consumable time of the remaining recoverable oil reserve, has remained in a range from 14 to 16.

The average oil reserve to production ratio of the world in 2004 is 43, due to the high ratio recorded in oil abundant region such as the Middle East. However, China’s ratio is still at a reasonable level which can ensure a healthy development of the country’s oil industry, he said.

The main problem for China’s oil industry is excessive extraction and consumption of oil, Zhang noted.

At the end of 2004, oil reserve of the country accounted for 1.5 percent of the world’s total while its production accounted for 4.5 percent, but its oil consumption accounted for 8.2 percent of the world’s total.

But Zhang said that China still has a huge amount of undiscovered oil resource reserve, as more than two-thirds of the country’s potential oil resources remain undiscovered.

Zhang suggested that China should take effective measures to further strengthen oil exploration and development, placing emphasis on establishing a new system in compliance with the market economy, improving the oil and gas basic geological investment mechanism, implementing a risk investment mechanism and encouraging competition in exploration and development.

He also suggested effective measures be taken to strengthen the evaluation and exploration of non-conventional oil and gas resources of the country.

China’s predicted oil shale reserve is 483.2 billion tons with only six percent established due to a lack of systematic survey and evaluation. Reserve of oil sands in China, which has not been identified, is predicted to have exceeded eight billion tons.