Oil producers will give priority to heavy oil exploration and production in
the next decade to meet China's increasing energy needs.
"As prices for conventional oil products will remain high in the long run,
heavy oil and alternative oil products will unavoidably become part of our
energy segment in the near future," Zhang Fengjiu, deputy chief engineer of
China National Offshore Oil Company (CNOOC), told China Daily Monday at the
first World Heavy Oil Conference.
Heavy oil a catch-all name for oil shale, oil sand and natural asphalt and
natural gas hydrate are becoming increasingly important substitutes for
conventional energy resources worldwide.
Zhang said that heavy oil production will hold a dominant position in his
firm's business. "By 2010, the daily production of heavy oil will surge to
500,000 barrels from the current 200,000," Zhang said, adding that heavy oil
will account for 60 per cent of CNOOC's total production then.
Jia Chengzao, vice-president of PetroChina, said his company is also
interested in tapping heavy oil resources. But he said it is still too early to
make any announcement.
As the cost of heavy oil exploration and production is high, Jia called for
more government policy support.
Bob Lockwood, president and chief executive officer of Cambridge Energy
Research Associates, based near Boston, Massachusetts, said China National
Petroleum Corporation (CNPC), PetroChina's parent company, is also targeting
global heavy oil resources by working closely with his organization.
"We have hammered out a memorandum of understanding (MOU) with CNPC, mainly
studying options of bringing more heavy oil resources from Canada to China,"
Lockwood said. "I believe the MOU can expand beyond that scope to joint research
on technology innovation and investment options."
CNPC and the government of the Canadian province of Alberta initiated the
four-day global heavy oil conference, which opened on Sunday. Canada is rich in
Ma Kai, head of the National Development and Reform Commission, said at the
opening of the conference: "The government should encourage and support the
development of heavy oil, in line with its 11th Five-Year Plan (2006-10)."
Unconventional forms of oil and gas, such as heavy oil, are important to
China's energy industry, according to the 11th Five-Year Plan. Currently, heavy
oil accounts for 20 per cent of China's total oil reserves, said Ma, the top
Heavy oil is defined as the fuel oils that remain after the lighter oils have
been distilled off during the refining process. It is highly viscous and
basically would not travel in its natural state; heat or dilution would be
needed to move it.