The ‘Mega’ Oil Field That Will Never Boom

2017 will most likely witness a continuation in the decline of conventional oil discoveries. This year has seen no major onshore discovery, pretty much all significant finds were confined to offshore areas of the Americas, where Mexico’s continental shelf unearthed two highly promising formations, the Ixachi (1.5 BBbl) and Zama (1.4 BBbl), whilst Alaska’s Horseshoe discovery gave rise to hopes that this once-prolific region might be back in the game again. Europe’s headway has been incomparably paler – it seems that the biggest find will be Statoil’s Verbier field which is estimated to contain up to 0.13 BBbl. In stark contrast with the above, China’s CNPC announced last week that its latest discovery, the Mahu field located within the Junggar Basin of Xinjiang province, is estimated to hold between 0.52 and 1.24 billion tons of crude (4-9 BBbl), by far the largest find of recent years – provided that one is to believe that this oil is actually recoverable.

Shortly after the announcement Chinese media were replete with overly upbeat sentiments that China is finally on the brink of ending its decade-long dependence on oil imports. These were supported by the claim that further oil discoveries are to be expected in the Junggar Basin, also surpassing the 1 billion ton mark. However, very rarely did one encounter mentions of the Junggar Basin’s extremely difficult geology – not to mention the fact that Chinese estimates are usually given as oil-in-place, not recoverable volumes. This is not to say that the Junggar Basin has been under close scrutiny for decades, prospecting works there started right after the Communist Party established its power and the Karamay field has been producing for more than 60 years (output still at around 200 000 bpd). The emergence of a new oil-producing region in China’s eastern provinces would be an unquestionable blessing as its model fields along the Pacific coast (Daqing, Shengli, Huabei) are in irretrievable decline…

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