Volume 2, issue #7 - 12-03-1997

Feb. 21, 1997 The Tarim Basin in Northwest China's Xinjiang Uygur Autonomous Region expects to produce 4.4 million tons of crude oil this year. The 560,000-sq-km Basin is estimated to have 10.8 bnt of oil reserves and 8,400 bncm of natural gas reserves, accounting for one-seventh and one-quarter, respectively of the country's total reserves. It is considered an important strategic area for China's oil industry. To accelerate oil development there, in April of 1989 the China National Petroleum Corporation set up the Tarim Basin Oil Exploration and Development Headquarters. In an interview, Liao Yongyuan, senior engineer and deputy head of the Headquarters, told that this year they will concentrate on intensifying oil exploration in major areas and try to find 150 mmt of oil reserves and 50 bncm of natural gas reserves. Oil production in the basin has been confined to crude oil for the time being, and the basin has almost no natural gas production. Little natural gas is now produced and most is burned off during oil production. As an experimental area for oil development reforms, the Headquarters has tried to apply the advanced management techniques of major oil companies elsewhere and has seen fast growth in exploration.
By the end of last year, workers had discovered ten complete oil and gas fields, 26 industrial oil-bearing strata, and had verified 1.47 bnt of reserves. The basin produced 3.15 mmt of crude oil last year, putting it eighth in China, with 142 million yuan in sales. More than 20,000 workers have, in the past eight years, produced an oil development bonanza there, even with its harsh environment and natural conditions, said the 36-year-old senior engineer. The basin has a success rate of 46 % in oil wells, 20 % points higher than the world's rate for deep-stratum oil exploration. It also costs 144 million yuan less than the national average to develop an oilfield capable of producing 1 million tons of crude oil there.