【Industry Updates】Two super-large shale oil fields of Sinopec are established (Xinxing and Qintong oil fields)

The Xinxing and Qintong oil fields of Sinopec are both typical shale oil deposits in continental fault basin environments. It marks the birth of two shale oil fields in the continental fault basins of eastern China. The new oil field is located in the Jiyang Depression of the Bohai Bay Basin, while the Qintong Oil Field is situated in the Northern Jiangsu Basin.

The emerging oil fields are located at depths of 2,900 meters to 4,000 meters; they contain a high proportion of brittle minerals, and their reservoirs possess good development potential. By the end of 2024, 19 horizontal wells had produced a total of 291,100 tons of oil. Among them, the first exploration well, Fan Yeping-1, produced 171 tons of oil per day in its initial phase; it was in operation for 1,422 days, during which a total of 23,800 tons of oil were produced.

The Zhen Tong oil field lies at depths of 3,430 meters to 4,560 meters, boasting good development potential. By the end of 2024, the 8 horizontal wells had produced a total of 113,000 tons of oil; among them, well Zhenye 1HF has been producing oil by natural flow for over three years, with a total output of 31,400 tons.

Shale oil refers to the petroleum resources contained in shale layers rich in organic matter. China possesses great potential for exploring shale oil resources, which represent an important strategic resource; they will also serve as a crucial source to ensure a stable supply of crude oil in the country in the future. Its developmental and distribution characteristics differ from those of marine sedimentary basins in North America; it is characterized by a recent age, low maturity, complex faults, unique mineral compositions, as well as high temperature and pressure. The challenges associated with its exploration and development are of a world-class nature, and there is no existing experience to draw upon.

The shale formations in both oil fields are characterized by high pressure and good compressibility, as well as high production per well, good results from pilot production tests, and a long period of stable production. The emerging oil fields are located at depths of 2,900 meters to 4,000 meters; they contain a high proportion of brittle minerals, and their reservoirs possess good development potential. By the end of 2024, 19 horizontal wells had produced a total of 291,100 tons of oil. Among them, the first exploration well, Fan Yeping-1, produced 171 tons of oil per day in its initial phase; it was in operation for 1,422 days, during which a total of 23,800 tons of oil were produced. The Zhen Tong oil field lies at depths of 3,430 meters to 4,560 meters, boasting good development potential. By the end of 2024, the 8 horizontal wells had produced a total of 113,000 tons of oil; among them, well Zhenye 1HF has been producing oil by natural flow for over three years, with a total output of 31,400 tons. Since 2014, Sinopec has focused on independent innovation and strengthening fundamental research, and has developed innovative theoretical understandings regarding shale oil exploration in continental faulted basins, as well as a set of corresponding engineering technologies, in areas such as the Jiyang Depression and the Northern Jiangsu Basin.

In terms of theoretical understanding, a theory for the enrichment of shale oil in continental fault basin environments was developed, based on the principles of early salinization, inorganic control of storage, integration of source and reservoir, and overpressure sealing, which laid the foundation for practical applications in shale oil exploration.

In terms of exploration and development, two deployment models have been established: a three-dimensional horizontal well network in stable structural areas, and directional wells in complex structural areas.

In terms of engineering technology, an evaluation system for onshore shale oil that integrates geology, experimentation, and geophysics has been developed, enabling accurate prediction of the geotechnical \"sweet spot\" for shale oil extraction； Innovation has led to the development of a series of engineering technologies suitable for terrestrial shale oil exploration, such as cost-effective and efficient development methods like factory-based rapid completion of horizontal wells, electric fracturing, and automated remote control. At present, the longest horizontal section in experimental wells is 3,055 meters, with 54 fracturing sections.

Sinopec continues to intensify its efforts in the exploration and development of shale oil, with continuous breakthroughs being achieved in various exploration areas. In January 2021, Sinopec successfully drilled a high-yield shale oil and gas well in the Fuling area of Chongqing, namely Well Taiye 1; by 2024, the production of shale oil from the Fuling shale gas field exceeded 30,000 tons for the first time. In December 2021, Sinopec identified a favorable area of 420 square kilometers in the Qintong Depression of the Northern Jiangsu Basin, with shale oil resources amounting to 350 million tons. In July 2022, another strategic breakthrough was achieved in the Subei Basin: the HF well drilled in the Hua 2 area produced over 30 tons of oil per day and more than 1,500 cubic meters of natural gas, marking the activation of the 1.1 billion tons of shale oil resources located in the Gaoyou and Jinhu depressions of the Subei Basin. At the same time, efforts should be made to enhance integrated geological engineering to increase production and reduce costs, as well as to realize benefits from integrated exploration and development. In 2024, Sinopec’s annual shale oil production reached 705,000 tons, an increase of 308,000 tons compared to the previous year.