A new oil field in remote northwestern China could trigger the country’s first shale oil boom, according to an analyst at investment bank Morgan Stanley.
A PetroChina test well at the Jimsar oil field in Xinjiang province turned out 100 tons (733 barrels) of oil per day, suggesting “that shale drilling could finally have a true commercial potential in China,” Oilprice.com reports.
“We believe the Jimsar shale oil discovery is likely to trigger China’s shale oil revolution,” wrote Morgan Stanley analyst Andy Meng.
“Oil demand continues to grow in China, while domestic production has been declining in recent years due to the depletion of mature conventional oil fields,” Oilprice states. “As part of a government push to boost domestic energy supply, China National Petroleum Corporation (CNPC) and Sinopec are raising investments to increase local oil and gas production and are accelerating drilling at tight oil and gas formations in western China.”
Although the results from the Jimsar field represent a shale boom for the world’s biggest importer of crude oil, Oilprice notes that the expected daily output of 100,000 to 200,000 barrels would pale in comparison to the more than eight million barrels per day currently coming from the United States.