China's Largest Oil-Products Producer to Invest $1.46 Billion to Build Oil Field in Northwest China

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Researched by Industrial Info Resources (Sugar Land, Texas)--China Petroleum & Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing), China's largest oil-products producer, plans to invest $1.46 billion in northwestern China's Xinjiang Uigur Autonomous Region in order to expand the Xinjiang Tahe Oilfield, which is expected to be capable of producing 214,000 barrels per day (BBL/d) of oil by 2010.

The Xinjiang Tahe Oilfield, already an important oilfield of Sinopec, produced about 128,000 BBL/d of crude in 2008, registering an increase of about 13,000 BBL/d from 2007. Tahe also produced 1.27 billion cubic meters of natural gas, registering an increase of 320 million cubic meters from 2007, said a senior official with Sinopec. In 2009, the oilfield is expected to produce about 141,000 BBL/d of crude and 1.21 billion cubic meters of natural gas.

As one of China's fastest growing oilfields, the Xinjiang Tahe Oilfield is expected to produce 321,000 oil-equivalent barrels per day by 2015, of which crude constitutes 214,000 BBL/d and natural gas constitutes 5 billion cubic meters per year. By 2020, the oilfield is expected to produce between 428,000 and 535,000 oil-equivalent barrels per day, of which crude constitutes about 321,000 BBL/d and natural gas between 5 billion and 10 billion cubic meters per year.

The Xinjiang Tahe Oilfield is one of China's ten largest land oilfields and is located on the northern brink of the resource-rich Xinjiang Talimu basin.

Insiders say that western China is the most resource-rich area of China and also has one of the greatest potentials for development in China. Sinopec plans to add another 3 billion to 3.75 billion barrels of proven reserve to its total reserve in the west and also make efforts to add more proven reserves to its western reserves rather than eastern reserves starting from 2009.

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