Foreign Correspondence

[Amaunet]

China Unveils Finding of New Oil Deposits

7:24 AM PDT, April 6, 2004


By ELAINE KURTENBACH, AP Business Writer


SHANGHAI, China — The government has announced discoveries of new oil deposits that it says will help reduce China's increasing dependence on imports, amid growing worries over the country's energy security.

The new oil finds, discovered using technology developed by Chinese scientists, are thought to total about 2 billion barrels, said Tao Jinsong, an official with the Ministry of Science and Technology, on Tuesday.

Most of the new finds are located in the Shengli oil field in northeast China, one of the country's biggest oil-producing regions.

The discoveries were made by China Petroleum and Chemical Corporation, or Sinopec, with government support, in fault lines near currently exploited oil deposits, Tao told The Associated Press. His comments confirmed a report in the state-run newspaper China Daily.

Since they are located in faults, the size of the deposits would not be as large as those found in places like Iraq and Kuwait, though the amount discovered was still significant, Tao said.

Altogether about 4.2 billion barrels of new oil deposits have been identified in 12 different locations. About half of those discoveries were previously reported.

"These new discoveries have eased our anxiety over oil shortages," the China Daily cited Yan Jisheng, a ministry official in charge of natural resources, as saying.

"We know we have more oil deposits to support the country's long-term economic development," Yan said.

Output at Shengli and at China's biggest oilfield, Daqing, has begun to decline after decades of production, adding to worries that after decades of virtual self-sufficiency in energy the country is becoming too dependent on oil imports.

Tao said scientists were also working to develop new extraction methods to increase the amount of oil that can be pumped from each deposit.

"Normally we're able to claim 30 percent of the reserve from each well," Tao said.

China imported about 681 million barrels of oil in 2003, an increase of 30 percent over the previous year. Imports are expected to rise to 700 million barrels this year, against total demand of 1.9 billion barrels.

Domestic production has begun to plateau. Crude oil output in 2003 was about 1.18 billion barrels, up from 1.17 billion barrels in 2002 and 1.15 billion barrels in 2001, the China Daily report said.

With government encouragement, major Chinese oil companies like Sinopec and offshore giant CNOOC have been acquiring overseas oil and gas fields to help assure secure supplies.



http://www.latimes.com/business/investing/wire/sns-ap-china-oil-imports,1,3226726.story?coll=sns-ap-...