Volume 3, issue #8 - 12-03-1998

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China investing strongly in western region

Jan. 26, 1998 China is looking for oil in the nuclear wasteland in the remote northwest Xinjiang Uygur Autonomous Region, following last year's decision by the Beijing government to place a moratorium on nuclear testing.
On the lifeless land of western Lop Nur, a granite stele engraved with the inscription "The Centre of China's First Nuclear Test Explosion" stood alone in the wilderness, with only the footprints of wild camels around it.
But now, about 8 km south of the stele, is a group of temporary buildings which house more than 100 geologists and workers looking for oil.
At Lop Nur, a desolate area often dubbed the "zone of death," China conducted 23 atmospheric nuclear tests from 1964 to 1981. But it formally became a party to the Nuclear Non-Proliferation Treaty in March 1992 and last July finally announced a moratorium on nuclear testing.
Sixteen years after China stopped testing at the site, the radioactive level has dropped to a normal standard and poses no threat to the environment, according to researchers working there.
"Our gamma radiation measurements have shown that the radiation here is pretty low, and there is no nuclear contamination of the water or soil," said Huo Wenhong, director of the prospecting team sent by China Petroleum and Natural Gas Corp.
"My colleagues and I are not worried about any health effects due to environmental exposure," he added.
China Petroleum and Natural Gas Corp. has spent nearly 100 million yuan ($ 12 million) conducting geological prospecting since last year and half the job was done by Huo's team.
But even if there is no nuclear contamination threat, Huo said his team has to endure the hardships of other natural elements in order to work and live in the desolate region.
"Our chief challenges here are howling winds, terrible droughts and burning sunlight," he said.
Lop Nur was a huge lake and marsh land until it completely dried up in 1972. Since the legendary Silk Road city Loulan was rediscovered by a Swedish archaeologist by the lakeside in 1900, however, only a few intrepid Chinese and Western scientists and archaeologists have trekked here.
"I believe that Lop Nur and Loulan will come back to life if we find oil here," said geologist Wang Mili.
The activities at Lop Nur are part of a major programme by the Xinjiang Petroleum Administration Bureau to develop giant petroleum and petrochemical industries in the next few years.
The central government is now putting a great deal of effort into boosting the economy of its strategic western regions, where Beijing fears instability among the majority Muslim population who have close affinity with people in the neighbouring republics of Central Asia.
According to official sources in the regional capital of Urumqui, Xinjiang has decided to develop "one black, one white (petroleum and cotton)" as its pillar industries for the 21st century.
According to Chen Hanyang, deputy director of the Petroleum Administration Bureau, there will be a substantial expansion of the search for the huge oil and gas reserves thought to exist under the inhospitable deserts that dominate China's far west.
For this purpose, it has introduced equipment and advanced technology from the United States, France, Canada, Germany, Italy and Japan for use in the fields of geographical surveying, production, well logging, refinement and the petrochemical processing industry.
During the ninth five-year plan (1996-2000), Xinjiang expects it will extract 45.8 mm tons of crude oil and 30 billion cubic meters of natural gas, Chen said.
By the year 2000, it plans to produce 10 mm tons of crude oil annually, and complete the establishment of the Karamay-Dushanzi petrochemical base, which will involve an annual average investment of 1.5 bn yuan ($ 180 mm) over the period. This represents a 50 % increase over spending in the first two years of the five-year economic plan.
At the same time, the bureau plans to spend 3 bn yuan ($ 360 mm) yearly on oil and gas production.
Karamay Oil Field, established in 1955, was China's first large oil field, and using this as a springboard, the bureau has now explored 20 oil fields and set up four petroleum bases.
"The oil exploration programmes are in their initial or middle stages, while it is still early days for gas exploration, although there are indications of great potential," Chen said.
For the last seven years, Xinjiang has managed to retain its fourth place among the country's land-based oil-producing areas and is also the largest petrochemical base in western China.
Last year, crude oil output reached 8.3 mm tons, and this is expected to rise to 9.5 mm tons a year by the turn of the century.
According to Chen, in the next three years, six petrochemical projects will be constructed, including the Dushanzi ethylene extension project and a 500,000-ton polyester project.
The Dushanzi complex is the largest petrochemical enterprise in China National Petroleum and Gas Corp.