Monday, March 26, 2007

China's Explores Ultra-Deep Drilling.

In southwestern Sichuan Province the drilling of a well 8,875 metres deep has begun, with the intention to explore an untapped underground oil and gas field. The project is underpinned with an investment of of 300 million yuan (almost 40 million US dollars); the drilling was commenced on March 20th in Mianzhu City and is expected to take 676 days to complete. The well is named "Chuanke No.1 Well", and according to Zhang Xiaopeng, who is the deputy chief engineer of Sinopec's southwest China oil and gas company, the first 100 metres have been drilled-out smoothly. It is hoped that by drilling this well, more will be learned about the distribution of oil and gas in the "ultra-deep stratum", which is the geological term for the stratum lying at depths greater than 7,000 metres. In April 2006, the discovery of the Pughang Gas Field, the largest ever located in China with a holding of 356 billion cubic metres, was announced by Sinopec in northeastern China.

In July 2006, the drilling of the "Tashen No. 1 Well" was completed in Tahe oilfield in the Tarim basin in northwest China, at 8,408 metres deep, but no gas was discovered there. It is hoped that the Chuanke No. 1 Well will provide a breakthrough in gas exploration in the ultra-deep stratum. Indeed, the drilling-rig that the Chinese are using is designed to drill as deep as 12,000 metres, which is close to the depth of the SG-3, drilled in 1989 down to 12,262 meters (7.6 miles), on the Kola Peninsular, in the far north of Russia. That borehole is usually referred to as "Kola", in fact the deepest of several that were made there.

In an effort to extend world oil supplies, many deep-sea drilling projects are being undertaken, for example in the Gulf of Mexico. China is also adopting this plan and PetroChina, which is the nation's major oil and gas producer, intends to spend 100 million yuan (13 million US dollars) in the spring of 2008 to drill its first deep-water well in the South China Sea. Offshore drilling involves particular problems and a large investment in different equipment than is employed for onshore operations, where PetroChina has considerable expertise. The well will be drilled near Xisha, which is an island located 280 km southeast of Hainan Island, and in waters 3,000 m deep. Since China does not as yet have its own deep-water drilling vessels, the offshore specialist CNOOC's sister firm, China Oilfield Services, has formed a collaboration with the Parent China National Offshore Oil Corp. to build a deep-water drilling-rig using Norwegian technology, at a cost of $600 million (US).

China's deep water is effectively virgin territory, and has attracted US and Canadian investors, including Husky Energy, who announced a major discovery of gas in deep waters of the South China Sea last July. In a separate enterprise, the capacity of the Kazakhstan-China oil pipeline (which is owned equally by China national Petroleum Corp. and Kazakhstan's Kazmunaigaz) is planned to be doubled to provide 20 million tonnes of oil per year, and the expansion programme could begin in 2008.

India too has an interest in China's deep-sea exploration projects, since this is also a nation in an unprecedented phase of industrialisation and technological development, activities that are crucially underpinned by securing adequate supplies of oil and gas. To aid the common aims of these two great and populous nations, China is seeking close cooperation with India in the oil and gas industry. Wang Tao, senior vice-president of the World Petroleum Congress and also a former Chinese government minister, said: "We would like India to participate in our offshore and deep-sea projects and also explore jointly opportunities abroad." He further confirmed that, "plans for cooperation has the mandate from the Chinese president." Presumably this means "opportunities" in the Middle East, Africa and South America; clearly in competition with supplying the resource needs of The West.

Both countries are ramping-up world demand for petroleum to fuel their massive economic growth, and it makes sense that the two mighty eastern neighbours should support one another rather than entering into squabbles between themselves, especially when an East-West conflict over oil comes about - as it inevitably will, for a resource that is in decline. Then what, I wonder? It is interesting that the resource of military might is growing in the hands of The West (including the UK) and Russia, both of whom are revamping their nuclear arsenals. Recently, India came second place to China as a result of the latter's tough manoeuvres to claim a piece of Canada's PetroKazakhstan, with major activities is Kazakhstan, which is one of several examples where Indian and Chinese companies have been pitted against each other. On the other hand, a viable cooperation between India and China in the Greater Nile Project in Sudan was demonstrated by a consequently enhanced production of oil there.

Meeting the inexorable world demand for oil is a major challenge, and will become increasingly so as the world reserve declines. There is potentially a large resource of oil, if unconventional sources such as tar sands, shales and coal-liquefaction are included, but these sources are highly dependent on other resources, especially gas and water to recover them. It is debatable exactly how much of the acknowledged "trillion barrels" that remain in conventional oil-wells are really recoverable. In any event, the world is running out of cheap oil, and this may well precipitate East-West conflict, while it is debatable who will take who's side precisely out of the nations of the US, Europe, South America, Russia, and China-India. In any event, deep-drilling operations (in rock or deep-water) are a last resort for conventional oil and gas extraction and such worldwide investment as is ongoing can be heard as an alarm that the world needs to find alternatives sooner rather than too-late.


Trinifar said...

I fear your concerns for conflict over oil is all to realistic. Of course one more world war would be enough to reduce the demand for fossil fuels by reducing the population.

energybalance said...

Yes, that is all to true! maybe it will come to that - as part of the "Die-Off" scenario that I referred to in my last e.mail! It's a horrible thought.

Likewise, I had a letter published in "Chemistry World" pointing out that the world CO2 emissions will fall inevitably as the world oil supply falls, irrespective of whether we make direct policy decisions over Kyoto etc. or not.