Overseas Oil & Gas E&P

In 2016, the newly increased oil controlled reserves were 143 million tons and predicted reserves were 223 million tons; while for natural gas, the two numbers were 288.1 billion m³ and 399.7 billion m³ respectively. In the whole year, we produced 35.655 million tons crude oil totally, decreasing by 6.08 million tons with a drop of 14.6%; we produced 21.59 billion m³ , increasing by 894 million tons with a rise of 4.3%. Annual newly established capacity for crude oil was 1.42 million tons and that number for natural gas was 3.64 billion m³ .

Oil & Gas Exploration

With strong focus on advancing efficient exploration, we harvested 2 major breakthroughs, 2 great discoveries, 9 new discoveries and 14 new achievements in commercial discovery, by taking discovering scale and superior reserves as main direction and strengthening preliminary prospecting and risk exploration, basic research, scientific argumentation and deployment and management implementation.

2 major breakthroughs: After breakthrough in Shunbei 1-1H Well-the Shunbei #1 Fracture Zone in Tarim Basin, we implemented exploration and development integrated fast evaluation, had 7 completed evaluation wells producing over 100 tons high-yield light-weight oil flow daily in Ordovician, discovered Shunbei Oil and Gas Field and obtained the major breakthrough for “discovering Ta River beyond Ta River”. For Yongye 1HF Well established in Yongchuan Exploration Area, Sichuan Basin, 141,000 m³ high-yield gas flow was produced daily in trial production of Longma River Formation, a sign that we realized the great breakthrough for exploration in shale gas new area.

2 great discoveries: For the second layer of Wei #4 Well in Weixi Exploration Area of Beibu Gulf, over 1,000 tons high-yield oil flow was produced daily in trial production; Wei 6 Well, which is deployed independently, also realized high-yield oil and gas flow, which indicated we obtained the important discover in oil and gas in proprietary waters. For Guaican #1 Well established in Yin’e Exploration Area, Inner Mongolia, we obtained industrial oil and gas flow in trial production, a great discovery in new exploration.

9 new discoveries: There were 6 petroleum new discoveries in trap preliminary prospecting of inside of Ordovician Yingshan Formation and Carboniferous clastic rock of Ta River Oil Field, Carboniferous and Chunguang stratum oil and gas reservoir in western Chepaizi area in the western border areas of Junggar Basin, Jiyang depression “Three New” field and Gaoyou depression subtle reservoirs; there were 3 new natural discoveries in trap preliminary prospecting of Hangjinqi Duguijiahan area, Chezhen depression Paleozoic erathem and Songnan Dehui fault depression.

14 commercial discoveries: There were 9 petroleum scale commercial discoveries in evaluation exploration in the western border areas of Junggar Basin, Shengli Beach Shallow Sea, Jiyang depression Paleozoic erathem, glutenite formation in northern zone of Dongying, Jinhu depression, Gaoyou depression, Qintong depression, Biyang depression and Dongpu depression. There were 5 natural gas scale commercial discoveries in evaluation and exploration of Shilijiahan Zone in Hangjinqi Region, Leikoupo Formation in Xinchang, West Sichuan, Jurassic system in Zhongjiang block of West Sichuan, Songnan Deep Zones, etc.

Natural Gas Production

In terms of shale gas, we implemented efficient production of Fuling Shale Gas Field; the year-around newly established capacity was 2 billion m³ , the accumulated established capacity was 7 billion m³ and annual gas production was 5.04 billion m³ .

In terms of conventional gas, the year-around newly established capacity was 1.64 billion m³ . We completed 3.4 billion m³ cleaned gas capacity construction of Yuanba Gas Field completely and boosted rolling benefit realization of middle-shallow layer in West Sichuan actively; the newly established capacity was 460 million m³ , annual gas production was 5.5 billion m³ with a increase of 680 million m³ . We boosted North Ordos capacity construction continuously, with newly established capacity for 640 million m³ and annual gas production for 3.52 billion m³ .

Oil Field Development

We implemented benefit allocation fully and strengthened structural adjustment.

In terms of quantity increase, we strengthened on rolling exploration and oil reservoir evaluation and highlighted economic evaluation and risk evaluation; as a result, success rate of rolling evaluation well reached 70%, we completed a batch of production bases such as eastern middle-shallow layer fault block and lithologic reservoir and mesozoic & paleozoic group and newly increased commercial developed reserves was 42.63 million tons. We were strict on the arrangement of project benefit evaluation value taking research, emphasized scheme design optimization, executed standard cost economic evaluation value taking research, formulated different kinds of oil reservoir standard development index models, optimized and reevaluated continuously constructed project, strengthened new drilling well design reconsideration, liquidized remnant assets, matched with process technology, lowered project construction cost and ensured energy and efficiency increase. Average daily oil production for single well which was put into production recently was 6 tons, with a growth of 0.4 tons; we had development cost reduced further.

In terms of stock, we fully popularized and applied “three lines and four zones” model of Shengli Oil Field to direct benefit development; continuously boosted output structure, injection and production structure and measurement structure optimization, controlled natural decline and lowered water content and operating cost. We paid more attention to oil field development foundation tamping, injection and production relation improvement for water-drive reservoir, improvement of water injection “three rates” (layered water injection test rate, test pass rate and pass rate of layered water injection), strengthening of flow field adjustment and improvement of water-drive development benefit. For heavy oil thermal recovery reservoir, we completed thermal efficiency management and improved economic gas oil ratio. For chemical reservoir, we highlighted personalized adjustment and improved ton-focused oil exchange ratio. In the whole year, we closed 2,680 oil wells that were invalid temporarily, measurement workload had a decrease of 34.6%, effective rate rose by 9% and oil measurement cost per ton decreased by RMB 7.9.