Block 12 at Tahe in Xinjiang holds geological reserves of as much as 200 million tons (1.47 billion barrels) of oil equivalent, the parent of Sinopec, as the Beijing-based company is known, said today. Tahe may add 15 percent to Sinopec's reserves and 5 percent to its net asset value, said Gordon Kwan, head of oil and gas research at CLSA Ltd. in Hong Kong.
BIG OIL
The Tahe field is the third major oil and gas discovery China has announced this year as the world's fastest-growing major economy intensifies its search for energy supplies. Sinopec's spending on exploration will account for 45 percent of total 2007 expenditure as it drills in areas including the oil- and gas-rich province of Xinjiang.
``We expect Sinopec's crude reserves to grow 10 percent by 2010, which will mainly come from the Tarim Basin, where the Tahe field lies,'' Qiu Xiaofeng, oil analyst with China Merchants Securities Co., said today from Shenzhen in the southern province of Guangdong.
Sinopec's Shanghai-traded stock rose as much as 5.3 percent to 13.76 yuan and traded at 13.52 yuan at 2 p.m. China's benchmark CSI 300 Index was 5.7 percent lower after the government tripled the tax on securities transactions to cool a rally in domestic share markets. Sinopec's Hong Kong shares fell as much as 3.6 percent to HK$7.79 and last traded at HK$7.83.
Appraisal Drilling
Should 30 percent of Tahe's deposits turn out to be recoverable, the field's proven reserves may reach 500 million barrels, one-third of PetroChina's Jidong Nanpu discovery, Kwan at CLSA wrote in e-mailed comments today.
Before these volumes can be booked, more appraisal drilling will be required and they must be certified by third-party international audits to meet U.S. Securities and Exchange Commission standards, according to Kwan. This may happen by April next year at the earliest.
China wants new domestic oil fields to help curb a growing reliance on purchases of foreign crude, which climbed to 43 percent of total demand last year, Sinopec deputy planning director Qin Weizhong said May 24. The nation shipped in a record 3.6 million barrels of oil a day last month and 3.3 million barrels a day in March, customs figures show.
Sinopec parent China Petrochemical Corp. announced the Tahe discovery in its in-house newsletter today.
Longgang Field
PetroChina the nation's biggest oil company, will spend 40 billion yuan ($5.2 billion) by 2012 to develop the nation's biggest oil discovery in half a century, Chief Financial Officer Wang Guoliang said May 16.
PetroChina's Jidong Nanpu field in Bohai Bay off the northeast coast has geological reserves of 1.02 billion tons of oil equivalent, including ``proved reserves of original oil in place'' of 405 million tons and ``probable'' reserves of 298 million tons, PetroChina said May 3, using industry measures.
PetroChina plans to produce 4 billion cubic meters of natural gas from its Longgang discovery in Sichuan province by 2010, the China Securities Journal reported May 28, without saying where it got the information.
The Longgang field has reserves of at least 500 billion cubic meters, said the newspaper, which is affiliated to the official Xinhua news agency. The reserve exceeds estimates at Sinopec's Puguang gas field, it said.
PetroChina will announce details of Longgang's reserves by the end of this year, Chairman Jiang Jiemin said March 19.
Sinopec's Puguang gas field in Sichuan, announced last August, may have proven reserves of 356 billion cubic meters of gas by the end of last year, Sinopec said May 9.
Sinopec set up a subsidiary to bolster oil and gas exploration as the company seeks ``big and middle-sized'' oil and gas fields, Sinopec Group said yesterday.
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