CHINA OIL PRODUCTION PROSPECTS

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-01137R000100050008-6
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• Document Creation Date: December 12, 2016
• Document Release Date: July 12, 2001
• Sequence Number: 8
• Publication Date: April 1, 1977
• Content Type: REPORT

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Secret
NOFORN-NOCONTRACT
China
Oil Production Prospects
Secret
ER 77-10030
April 1977
Copy 3j2
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Summary
China's oil export potential has drawn worldwide attention since the 1973 Arab oil
embargo, which coincided with China's first commercial sale of crude oil. Some
predictions have been unreasonably high, including one that presents China as a future
Saudi Arabia. These predictions assume China has vast oil reserves and the financial and
technological means to exploit them.
Actually, not even the Chinese know the size of their reserves. While we have no
evidence that China's reserves are on the Middle East scale, we believe they are
considerable. Working with limited information, experts in academia, oil companies, and
the US Geological Survey (USGS) generally agree that China's onshore oil reserves are
comparable with the 39 billion barrels (BB)' remaining in the United States. We share
this view. Offshore, pioneer seismic studies by Japanese and Western oil companies are
dampening earlier hopes that the eastern continental shelf might be one of the world's
most prolific oil and gas reservoirs. The most optimistic estimates now suggest offshore
oil reserves are about the same as those onshore.
Beyond the question of reserves, there are severe financial and technological
restraints on increasing Chinese oil production and exports. For 26 years, Peking has
force-fed the oil industry with funds and technical manpower. In response, output has
grown 20 percent or more annually, much faster than in the rest of industry. Crude
output reached about 1.7 million b/d in 1976, comparable with that of Indonesia. Now,
however, the rate of growth will certainly decline. The most accessible reserves are being
exploited; investment in other industries, especially coal and steel, can no longer be held
hack to free funds for oil. Moreover, trained manpower is spread thin just to operate the
existing industry. Internal conflicts have not allowed the influx of foreign capital and
technology needed to rapidly develop offshore reserves.
The estimated reserves of about 20-33 BB in the north and northeast?the regions
likely to supply the bulk of output in the short run?would be exhausted in 11 years if
output were to continue to grow at the 20-percent rate. If the growth rate were to drop
as low as 10 percent, expanding domestic demand might not be satisfied. Developing the
western and offshore reserves fast enough to support recent growth trends may not be
feasible without help from the international oil companies. Some foreign technology has
been acquired through selective purchases of US and other advanced equipment,
covering the gamut from exploration through tertiary recovery, but not enough to
substantially affect output potential in the short run.
On balance, we believe that China will produce 2.4-2.8 million b/d by 1980. Most
of this oil will be needed for domestic consumption; exports are likely to be only
200,000-600,000 b/d. Within a decade or so, continuously expanding domestic demand
will absorb total capacity unless deposits in the west or offshore are proved and
exploited much more rapidly than expected.
Section I presents the limited body of literature on the size, distribution, and
characteristics of China's oil reserves and supplements it with the findings of oil
company and USGS geologists.
Section II provides estimates for national production of crude oil in China since the
Communist takeover in 1949 and for each of the major oilfields. In Section III the
major geological features, physical layout, history, production problems, and overall
contribution of each of the major fields are discussed.
Section IV assesses China's potential to expand crude oil production based on the
size and location of reserves, human resources, and capital and technology.
CONTENTS
I. OIL RESERVES
4
Onshore Reserves
5
Offshore Reserves
6
Oil Shale
7
Conclusions on Reserves
7
II. CRUDE PRODUCTION . .
9
III. MAJOR OILFIELDS . .
11
Ta-ch'ing
11
Sheng-li
12
Ta-kang
16
The Mystery Oilfields .
20
Ch'ien-chiang
20
P'an-shan
21
Fu-yu
22
The Western Oilfields
24
Dzungarian Basin . .
24
Tu-shan-tzu
24
K'o
25
Pre-Nan-shan Basin
26
Tsaidam Basin
27
General
27
Leng-hu
27
IV. POTENTIAL OUTPUT . .
28
APPENDIXES
A. Definitions of Reserves . . . .
30
B. Chinese Port Oil-flandling
Facilities
30
C. Chinese Crude Oil Production vs
Refining Capacity
31
D. Derivations of Chinese Crude Oil
Output Series
32
National
32
Sheng-li
32
Ta-kang
33
Yu-men, K'o-la-ma-i,
and Tsaidam
33
Ta-ch'ing
33
Note: Comments and queries regarding this report should be directed to [ of 25X1A
25X1A the Office of Economic Research, i Questions on the E. Chinese Oil Pipelines 34
technical aspects of the photographic analysis should be addressed to 25X1A
25X1A Office of Imagery Analysis, F. Oil Supplies for South China . 36
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I. Oil Reserves
1. Academics, oilmen, government
agencies, and trade organizations have
made numerous attempts over the last
decade to determine the amount of recov-
erable oil in China. The resulting estimates
vary widely, and as yet no estimate or set
of estimates has won widespread accep-
tance. This is not surprising since an
accurate reserve study requires access to
? relevant Chinese and Soviet liter-
ature,
? current and historical collections
of geological data on China,
?information on past and current
operations of the Chinese oil
industry, and
?worldwide catalogs of oil pro-
ducing strata to use as analogs.
2. No study has had all of the
information required. The Chinese them-
selves have not yet amassed all the neces-
sary data.' Since guesswork and intuition
have had to be substituted for most of the
detailed information needed on Chinese
geology and oil exploration activities,
there probably is greater uncertainty in
estimating oil reserves in China than for
any other region of the world.
3. Chinese Communist historians
trace geological surveys of China back to
1862, when an American began to survey
north China. Other Americans and then
Germans, Britons, and Russians followed.
A Department of Geology was established
within the Ministry of Industry in 1912,
an Institute of Geology was created in
Peking in 1913 to train geologists, the
institute staffed a new Office of Geologi-
cal Survey with 22 graduates in 1916, and
a Department of Geology was established
at Peking University in 1918. Other uni-
versities began to establish geology depart-
ments in 1927.
4. The work of Li Ssu-kuang (T.S.
Lee) and Huang Chi-ch'ing (T.K. Huang)
capped Chinese geological accom-
plishments of the pre-1949 period. Both
men proposed tectonic explanations of
China's geology. Li won a measure of
international recognition and lived long
enough to assume a succession of ministe-
rial-level posts in the Communist govern-
ment and guide the Chinese oil industry
through its infancy.
5. The cumulative efforts of for-
eigners and Chinese before 1949 barely
began the arduous task of understanding
China's geological makeup. In fact, the
three oilfields opened prior to 1949 (Tu-
shan-tzu, Yu-men, and Yen-ch'ang) were
each located more by obvious surface
bitumen and gas seeps than by subsurface
exploration guided by geological knowl-
edge. None was or is now a large pro-
ducer. Chinese oil reserves were essentially
untouched, to await discovery and devel-
opment under the Communist regime.
6. Because pre-1949 geological in-
formation is meager and because. Peking
refuses to release the results of post-1949
exploration, only a few fundamentals
about Chinese oil geology are known.
Meyerhoff3 lists 16 major sedimentary
basins with oil-bearing potential, of which
12 exist entirely on land, 1 (North China)
has about one-fifth of its area straddling
the Po Hai' and 3 (Kiangsu, Taiwan, and
Liu-chou) are mostly offshore (see Figure
1).
7. Of the land basins, all but two
are in the northern half of the country;
they total about 804,000 km2 in the
northwest and about 730,000 km2 in the
north-northeast. A Soviet geologist privy
to the findings of exploration up to 1960
Figure 2
Gravity, ?API
Wax, hexane
((A wt)
Sulfur (% wt)
Ta-ch'ing
32
(light-medium)
22.4
0.06-0.14
Sheng-li Ta-kang
20-24.6
(heavy)
15.3
0.88-1.35
Detailed analysis
not available for
Ta-kang crude. It
is reported to be
similar to Sheng-li
crude.
4
has written that hundreds of structures
favorable for oil had been found but that
the oil-bearing rock tended to be low in
porosity and permeability.'
8. The offshore basins front on
18,000 km of coastline and may have a
total area of 1.2 million km2 containing
at least 3 million km3 of sediment of
interest for oil exploration.
9. The onshore oil-bearing sedi-
mentary basins are lacustrine or continen-
tal in origin except for the major parts of
the Kwangsi-Kweichow Basin, 10 percent
or less of the Tarim Basin, one-half the
Szechwan Basin, and the possible basins in
Tibet not counted by Meyerhoff. By
contrast, most of the large oil deposits of
the world were formed and are trapped in
a marine environment.
10. The world's important produc-
ing continental deposits of oil yield high-
paraffin, medium- to high-gravity, very
low sulfur crudes. The crudes from the
three largest Chinese oilfields, which ac-
count for 80 percent of the national
output of crude, conform to the pattern
(see Figure 2).
11. China, despite its relatively
backward oil technology, has 13 com-
pleted thermal and 21 completed and 6
uncompleted catalytic crackers in its 44
refineries. These ex pensive facilities,
highly unusual in such numbers except in
the United States, are indispensable for
breaking up the heavy molecules in the
very large percentage of residuum from
primary distillation.6 Acceptable yields of
the more useful products such as gasoline,
kerosene, diesel fuel, and naphtha feed-
stock for petrochemical plants would not
otherwise be possible. The high paraffin
content, the large percentage of residuum,
and the Chinese refusal to adjust crude
prices to compensate for them have been
important obstacles to building up an
export market.
? 12. China can look only partly to
foreign technology as a shortcut for the
exploration and development of its lacus-
trine basins. Geological research and de-
velopment in most oil-producing countries
have focused on exploitation of marine
sedimentary deposits. Thus, there may be
substance to China's claim to having been
a pioneer in research on lacustrine sedi-
rnentology and the special problems of
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finding and exploiting continental depos-
its. A Soviet geologist who worked in
China during the 1950s writes that theory
on oil of continental?mainly lacustrine?
origin was a Chinese specialty, that they
were producing new theories and practices
for oil prospecting.
13. The particular lacustrine reser-
voirs that China is depending on for 80
percent of its production?in north and
northeast China?are complex, highly
faulted formations with oil-bearing strata
at many levels. Apparently, most reser-
voirs are in combination stratigraphic and
structural traps.1 These traps in lacustrine
basins are characteristically random and
not readily identified except by actual
drilling. Photography shows drilling sites
in eastern Chinese oilfields scattered over
wide areas. The geology of the large fields
seems to have been as important as
shortages of equipment and skilled man-
power in explaining why 5-10 years have
been spent to bring a new oilfield to a
modest 100,000-200,000 b/d8 output.
14. The risk inherent in estimating
the rate of ultimate recovery of oil in
exploitable pools is heightened by China's
unusual geology. Maurice J. Terman of
the USGS believes that Chinese lacustrine
deposits may have as large a volume of
hydrocarbons in situ as deposits in the
Middle East but that perhaps only a small
fraction will ever be recovered, because
there are so many scattered, unexploita-
bly small concentrations and because
much of the hydrocarbons remains in the
form of kerogen or oil shale.
Onshore Reserves
15. The consequential estimates of
Chinese onshore liquid oil reserves' are
set forth in Figure 3. They include the
findings of an oil corporation in-house
study, which represents the type of confi-
dential information guiding the plans of
large oil companies regarding China, and
the preliminary indications from a USGS
study scheduled to be completed by late
1976. There have been many more esti-
mates circulated,' 0 but on examination,
they turn out to be outdated or to be
guesses unsubstantiated by adequate re-
search and study. Peking's announcement
in May 1973 that Chinese oil reserves
were "third in the world" is not helpful
without elaboration, particularly on the
crucial matter of category of reserves
meant.
16. The Japan External Trade Or-
ganization (JETRO) estimate of
76.65-98.55 BB11 of exploitable reserves
onshore is the highest of any published.
Selig Harrison's article "Time Bomb in
East Asia" in the fall 1975 issue of
Foreign Policy gave wide currency to
JETRO's extreme optimism over China's
oil prospects. Harrison's prediction that
China by 1988 would emerge as a world
oil power'. 2 rested solely on onshore
reserves. He went on to say that within
two decades, when it is presumed huge
offshore reserves will be brought into
production, China will rank among the
world leaders in oil production.
17. JETRO estimates are not sup-
ported by published data or methodology.
Harrison in a footnote ascribed some of
JETRO's findings to the Nomura Re-
search Institute, but its work is not
available either. JETRO's optimism re-
garding China's oil future appears to be
based on a straight-line extrapolation of
past production rates. The volume of
reserves, amount of capital, and level of
technology, not to mention the size of
foreign markets required to justify an
annual output on the order of 8 million
b/d by 1988, are assumed to be forthcom-
ing. Professional geologists do not accept
the JETRO-Harrison line.
18. Meyerhoff, an oil geologist
with long experience in oil companies and
the USGS, has done extensive research on
Chinese oil reserves. His 1970 study,
grounded in a review of data available in
the USSR, was the first to offer a compre-
Figure 3
Estimates of Chinese Recoverable Onshore Liquid Oil Reserves'
Estimator Billion Barrels2
Japan External Trade
Organization
Meyerhoff
Oil Corporation
USGS
Total: 76.65-98_553
Land: 32.85
Po Hai: 43.8-65.7
Total: 45.25
Land: 39.6
Po Hai: 5.6
Total: 44.05-71.45
Total: 33.6'
Remarks
Implications widely publicized
by Selig Harrison4
In 1970, he estimated 19.6 BB
by totaling estimates for each
field and structure.' He
revised his total to 39.6 BB
in 1975 and added a speculative
figure of 5.6 BB for the Po Hai,
but has not published the
details of the revision.
By sedimentary basin and world
analogs, given in 50% and 0%
probability of occurrence.
By sedimentary basin and US ana-
logs. The Preliminary figure from
a study in progress.
1. For a definition of reserves, see Appendix A.
2. Including reserves under the shallow Po Hai but not deep offshore.
3. Petroleum Times, 11 Jul 75, p. 25.
4. Selig Harrison, Foreign Policy, No. 20, "Time Bomb in East Asia," fall 1975, p. 3-27.
5. A.A. Meyerhoff, American Association of Petroleum Geologists Bulletin, Vol 54, p. 1567-1580.
A.A. Meyerhoff, "China's Petroleum Potential," World Petroleum Report 1975, pp. 18-21.
6. The preliminary indications from a study still in progress.
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Figure 4
A.A. Meyerhoff's 1970 Estimates'
of Chinese Recoverable Onshore
Liquid Oil Reserves
Billion Barrels
Total
Total proved reserves
By basin
Dzungarian
Tarim
Tsaidam
Turfan
Pre -Nan-shan
Chao-shui
Min-ho
Ordos
North China
Sung-liao
Hu-lun-ch'ih
Szechwan
Kwangsi-Kweichow
Probable reserves
in known fields
Reserves in known but
untested structures
Reserves in partly ex-
plored basins
19.6
5.8
0.88
0.05
1.76
0.05
0.73
Negl.
Negl.
0.03
0.40
0.77
1.12
1.2
5.6
7.0
1. Meyerhoff updated his total in
1975 to 39.6 BB, plus a speculation
of 5.6 BB for the Po Hai
hensive analysis of Chinese reserves by
someone with recognized credentials. His
estimates, summarized by basin and oil-
field, are given Figure 4. Meyerhoff s
overall estimate of Chinese onshore re-
serves of 19.6 BB is the sum of the
estimates for each field, together with an
allowance for potential reserves in known
but untested structures and a second
allowance for possible reserves in partially
explored basins. The model's estimate is
adjusted upward as drilling at each field
confirms more oil deposits and as explora-
tion outside the established oilfields pro-
gresses. Also, only reserves associated with
particular oilfields are broken down geo-
graphically. In 1975, Meyerhoff raised his
original estimate to 39.6 BB, probably
from a greater appreciation of the role of
Ta-ch'ing and Sheng-li fields. He did not
publish a geographical breakdown. Crit-
icism of his findings rests on his reliance
on Soviet and Nationalist Chinese sources
whose information was a decade or more
out of date by 1970.
19. The oil corporation estimate of
Chinese oil reserves (see Figure 5) is part
of an in-house study performed in parallel
with studies of the Soviet Union and
Mexico. The objective was to determine
the potential influence of the three coun-
tries on the world oil export market. It is
the most useful of any study of Chinese
oil reserves to date because of its geo-
graphical breakdown. The quality of the
estimate is enhanced by the number and
expertise of the researchers and the depth
of the worldwide analog data used. On the
other hand, the corporation's geologists
lacked extensive data on ?the geologic
setting of Chinese basins. This is the only
study assimilating unclassified informa-
tion from Earth Resources Technology
Satellite (ERTS) photography. The use of
the photography, however, probably did
not have a significant impact on the final
estimates.
20. The corporation's method-
ology is to estimate reserves by sedimen-
tary basin, automatically providing a geo-
graphical breakdown and freeing estimates
from the influence of current production
levels or progress in exploration. The
"mean risk" figure of 44.05 BB-the
amount with a 50 percent probability of
occurrence-is their formal estimate of
Chinese onland oil reserves. Statistically,
the corporation concedes a bare possi-
bility-near zero probability of occur-
rence-of 71.45 BB.
21. The USGS is currently working
on a basin by basin study of Chinese oil
reserves. As of May 1976, the total area of
potential oil-bearing sediment had been
determined, but not the volume. Isolation
of relevant strata for analogs with US
strata for which histories of production
are known will be the last step in esti-
mating Chinese reserves.
22. Preliminarily, the sedimentary
area ratio for the USSR, the United
States, and China has been set at 3 to 2 to
1. The ratio for volume will be in the
neighborhood of 3 to 5 to 1. The USGS
has estimated US oil reserves, produced
and identified, to be about 168 BB.1 3 If
the volume ratio holds up through the
analog phase of the study, the reserves in
China would be 33.6 BB, as shown in
Figure 3.
23. Except for the JETRO figures,
the reserve estimates do not vary greatly.
None of them exceeds 100 BB, the largest
amount that oil company geologists con-
cede to have any chance of existing.' 4
Offshore Reserves
24. The wide Chinese continental
shelf extending along the entire coastline
from Korea to Vietnam has inspired the
greatest foreign optimism over China's oil
prospects (see Figure 1). The eastern
shelf, extending from the tip of the
Shantung Peninsula to Shan-t'ou and east-
ward to Japan, Korea, and Taiwan, has
particularly drawn interest because of the
huge volume of sediment left by the
Huang-Ho and the Ch'ang Chiang. A
UN-sponsored report following a survey
of the eastern coastline by the ship R. V.
Hunt in late 1968 said that "there is a
high probability . . that the continental
shelf between Taiwan and Japan may be
one of the most prolific oil and gas
reservoirs in the world." The project
leader was removed following a barrage of
criticism. It is true that the ship's equip-
ment was unable to penetrate all of the
formations most likely to contain oil, but
penetration was sufficient within the po-
tentially productive beds to justify reason-
able optimism.
25. Paradoxically, many of the oil
companies that criticized the UN report
eagerly sought rights to explore off the
east coast. The governments of Taiwan,
Japan, and South Korea cooperated by
blocking out lease areas extending roughly
half way from their coasts to the Chinese
coast in apparent hope that someday the
Chinese will accept the equidistant prin-
ciple for delineating the legal rights to the
waters. Peking issued warnings about in-
fringements of its sovereignty and began
to build its own and to import offshore
exploration equipment. To date, the oil
companies have made no positive finds
except for a gas pool off the southwestern
corner of Taiwan. In the last two years,
activity along the east coast has stabilized
at a low level. The Chinese themselves
have conducted one test drilling off the
coast of Kiangsu Province, using a catama-
ran devised from two old ship hulls.
26. Obviously, then, the requisite
data for formally estimating offshore re-
serves are not yet available. Meyerhoff
emphasizes that the volume of sediments
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still has to be determined, and explicitly
labels his estimate of offshore reserves of
30 BB as speculation.' 5 The oil corpora-
tion is very pessimistic; it estimates 2-3
BB and assert that whatever margin of
error may exist in this figure, offshore
reserves "cannot be expected to even
approach some of the estimates quoted in
the press (30 BB)." This judgment is
suspect because the corporation appar-
ently did not have the benefit of the latest
seismic data on the continental shelf.
27. The most recent geological in-
formation, derived from seismic studies
by American, European, and Japanese
firms, while clarifying the geology of the
continental shelf, does not provide the
data required for estimating oil reserves.
The shelf is now seen as a buried remnant
of the mainland, with a veneer of early
Tertiary and more recent deposits. Such
an interpretation tends to downgrade the
oil prospects for the shelf.
28. There is general agreement
among geologists that, along the east
coast, the parallel northeast-southwest
trending horst and graben structures
which characterize all of onshore east
China continue offshore to the edge of
and beyond the present continental shelf.
Terman's conclusion is that the difficul-
ties of locating and exploiting oil in the
stratigraphic traps to be expected in such
a tectonic framework may prove uneco-
nomical, given the additional difficulties
imposed by the water cover. In contrast,
Meyerhoff assumes that the Chinese will
acquire a total of 15 rigs by 1978 and will
succeed in drilling as many holes per unit
of time as would the international oil
companies with the same number of rigs.
He goes on to predict the discovery of
17.4 BB of proved reserves by 1982.
Finally, he predicts, on the basis of a
model developed by Jan-Olaf Willums, an
offshore output of 860,000 b/d by 1980
and 3.0 million b/d by 1985. These
figures exclude his estimate of 100,000
b/d to 120,000 b/d to be produced in Po
Hai by 1982.
Figure 5
Oil Corporation Estimates of Remaining Chinese Recoverable
Onshore Liquid Oil Reserves
Billion Barrels
Additional Recoverable
Reserves
Sedimentary Basin
Pro-
duced
Proved
50% Prob-
ability
(70 Prob-
ability
Dzungarian
1.0
4.0
7.0
Tarim
6.0
13.0
Tsaidam
2.1
2.0
4.0
Turfan
Pre-Nan-shan
Chao-shui
0.8
1.0
2.1
Min-ho
Ordos
1.4
5.0
North China
7.0
3./
6.8
Sung-liao
3.5
5.1
10.4
Szechwan
2.2
2.1
3.9
Kwangsi-Kweichow
.?.
Total
2.6
16.6
24.8
52.2
16.6'
16.6'
Total remaining recoverable
41.4
68.8
1. From the second column.
29. Of the two views, Terman's is
the more justified by the Chinese record
in coping with the similar graben com-
plexes onshore. The achievement of 3.0
million b/d in nine years from formations
similar to Sheng-li's and Ta-kang's would
represent a quantum jump in Chinese
capability to develop oilfields even with-
out the additional complication of the
water cover.
Oil Shale
30. Finally, there are kerogen or
oil shale deposits in China said by some
geologists to be comparable to the vast oil
shale deposits in the United States. Soviet
geologists in China through 1960 report
153.3 BB of shale reserves.' 6 After some
early efforts, the Chinese lost interest in
exploiting shale. The shale operations at
Fu-shun and Mao-ming have not been
expanded for many years, and there are
no indications of preparations for extract-
ing oil from shale in other localities.
Conclusions on Reserves
31. The size of China's total oil
reserves-onshore liquid, offshore liquid,
and onshore shale-is still unknown. Anal-
ysis of the limited body of information
available on onshore liquid reserves, per-
formed both on a statistical probability
basis and by totaling estimates done field
by field and structure by structure, has
yielded broad agreement on a range cen-
tering on about 40 BB of ultimately
recoverable reserves, with the possibility
that there may be as much as 100 BB. In
comparison, as of mid-1976, remaining
proved plus probable reserves were esti-
mated to be 390 BB in the Middle East,
64 BB in Africa, 47 BB in North Ameri-
can, and 42 BB in Latin America.
32. China's onland reserves, though
considerable, cannot support predictions
of China's becoming a world oil power.
Moreover, a large and growing domestic
demand for oil, the quality of many of
the reserves, technological problems in
extracting oil, and geopolitical considera-
tions argue against continuous increases in
exports.
? China presently consumes some
90 percent of its output, and
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domestic demand is increasing
rapidly.
? Foreign buyers already are balk-
ing at quality-price relationships.
? Large imports of technology may
be necessary to sustain recent
rates of increase and will almost
certainly be required to increase
output more rapidly.
? The high cost of transporta-
tion-including use of tankers
1. Throughout this report, the following abbrevia-
tions have been used: billion barrels (BB), degrees
gravity as defined by the American Petroleum Institute
( API, gravity), metric tons (t), million metric tons (mt),
percentage by weight (% wt), percentage by volume (%
vol), degrees celsius (?C), parts per million (PPM), barrels
per day (b/d), kilometers (km), square kilometers
(km2), and cubic kilometers (1cm3).
2. For an idea of the degree of detail in information
needed, see US Geological Survey Circular 725, Geolog-
ical Estimates of Undiscovered Oil and Gas Reserves in
the United States, Appendix.
3. A.A. Meyerhoff, American Association of Petrole-
um Geologists Bulletin, "Developments in Mainland
China, 1949-68," vol. 54, No. 8, Aug 70, p. 1567-1580.
4. Po Hai is the correct rendition of the body of water
commonly called the Gulf of Pohai. Hai in Chinese in
this case means gulf.
5. G. Ye Ryabukhin, Geologiya v Kitaya, Moscow,
1960. Translated in JPRS 3672, 10sAug 60, p. 15.
6. The initial process in refining is to heat the crude
oil in a distiller that bleeds.off constituents of the crude
small enough to enter Chinese
ports-and of heating the oil in
transit-has tended to limit sales
to nearby countries.
? Chinese officials differ over
whether to increase exports or to
save China's reserves for future
domestic consumption.
33. Offshore reserves, although pos-
sibly very large, are as yet the subject of
conjecture only. Even if very large, they
Footnotes
according to the temperature bands in which they
vaporize. The portion of the crude left unvaporized
after the highest practical temperature for the distiller
has been applied is the residuum.
Ta-ch'ing crude, which amounted to 54% of
national crude output during 1975, has a residuum
(unvaporized at ?C 343) of 68.0%. The residuums foro
the common crudes in the world oil trade of close to 32
API gravity (the weight of Ta-ch'ing crude) are as
shown in Figure 6.
7. A stratigraphic trap is formed when oil migrating
laterally through permeable, porous strata encounters an
impervious or relatively impervious barrier created by a
change in facies. Stratigraphic traps are difficult to
locate by geophysical surveys. Most oilfields in the
world have structural traps, particularly of the anticlinal
variety in which oil is trapped in arch-shaped structures.
Most arch-shaped structures are easy to locate by
seismic surveys.
8. Crude oil is not uniform in weight. At 15.6?C, it
consists of between about 6.98 and 7.73 barrels per ton,
representing API gravities of between 25 and 42?,
respectively. The conventional conversion factor of 7.3
barrels to the ton used in this report is justified by the
?easy change it allows between tons per year and barrels
per day. One million b/d equals 50 mt per year. The,
most common type of Chinese crude is API gravity 32
and has 7.28 barrels to the ton.
Figure 6
Gravity,
End
Temperature
Residuum
Crude
Origin
(?C)
Percentage
Arabian light
Saudi
33.4
343
46.1
Arabia
Iranian light
Iran
33.5
343
45.4
Darius
Iran
33.9
327
41.03
I3asrah
Iraq
33.9
343
44.54
Kuwait crude
Kuwait
31.2
360
47.53
Minas
Indonesia
35.2
343
56.5
Sassan
Iran
33.9
371
39.7
Gulf of Suez blend
Egypt
31.5
366
47.0
Reforma (Cactus
Reforma Isthmus)
Mexico
33.0
343
45.3
Trinidad blend
Trinidad-
33.6
343
31.2
Tobago
8
may prove difficult and expensive to
locate and extract. Neither the Chinese
nor foreigners have yet acquired enough
data on offshore sedimentary deposits to
make valid estimates. Predictions about
China's future as an oil power based on
exploitation of offshore deposits are pre-
mature.
34. China's large shale deposits will
be irrelevant in the next 10-20 years. The
exploitation of shale would be prohib-
itively expensive and irrational as long as
liquid oil is available.
9. Defined to include reserves under the shallow Po
Hai. These reserves are in formations that are extensions
of adjacent onshore oilfields.
10. Shell Oil in 1973 circulated an estimate of 19.98
BB of "recoverable oil" in established oil-bearing areas.
World Petroleum in 1974 estimated 300 1313,
including offshore.
World Oil on 15 Aug 74 esimtated 14.8 BB
"proved."
Iraqi geologists who visited China in 1971
afterwards estimated 12.4 BB "proved plus
probable."
Park Choon-ho in 1974 estimated 44.74-74.4
BB on the mainland. (In testimony before the
House Subcommittee on Asian and Pacific
Affairs of the Committee on Foreign Affairs
on 30 Jan 74.)
Jan-Olaf Willums estimates 20 BI3 offshore
along the east coast.
11. Petroleum Times, 11 Jul 75, p.25.
12. Harrison based his comparison with the Saudi
Arabia of 1974, i.e., an output of 8.24 million b/d.
13. Betty Miller et al., Geological Survey Circular 725,
1975, "Geological Estimates of Undiscovered Recover-
able Oil and Gas Resources in the United States," 1975.
25X9
15. Reported by Harrison (Harrison, above, p. 6) from
conversations with Meyerhoff as 12.84 BB for the East
China Sea, 5.60 BB for the Po Hai, 8.03 BB for the
South China Sea, and 5.60 BB for the Yellow Sea.
16. Y.I. Brezina, Toplivno energeticheskaya baza
Kitayskay Norodnoy Respubliki, Moscow, 1959. Trans-
lated in JPRS 3784, 31 Aug 60.
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II. Crude Production
35. China's production of crude oil
was insignificant before the Communist
takeover of 1949. The new government
inherited three oilfields-Yu-men, Tu-
shan-tzu, and Yen-ch'ang-which had an
aggregate output of less than 2,000 b/d.
None of these fields had the potential to
become large producers. In addition, two
shale plants in Fu-shun built by the
Japanese during the occupation of Man-
churia had a combined capacity of pro-
ducing about 1,000 b/d of liquid oil
annually.
36. Traditionally, China relied on
coal for a large part of its energy needs. In
the 1950s the limited requirement for
liquid fuels and lubricants was supplied
mostly by the Soviet Union. Imports rose
from about 4,000 b/d in 1949 to a peak
of about 66,000 b/d in 1960. With the
opening of the Ta-ch'ing Oilfield in that
year, imports tapered off rapidly. By
1963, Ta-ch'ing output of crude reached
88,600 b/d and Peking claimed self-
sufficiency in oil for China. Imports of
34,000 b/d in 1963 still composed more
than 20 percent of total supply; in 1964
the portion fell to 8.7 percent and since
then imports have represented less than 3
percent of total supply,
37. The opening of the Ta-ch'ing
Oilfield in 1960 and the Sheng-li Oilfield
in 1962 marked a shift of the largest
producing oilfields from the far west to
the north and northeast (see Figure 1).
The latter regions were and still are the
most heavily industrialized in China. Ta-
kang Oilfield in Hopeh Province, in the
north region, started producing in 1967.
These "big three" in 1975 accounted for
80 percent of national output.
' Ut these, 14 probably procluce
about 10,000 b/d, as shown in Figure 8.
39. Figure 7 presents estimafes of
Chinese crude oil output nationally and
25X1D
by selected fields. Since each series was
calculated from an independent set of
data,' geach year's total of output at
individual fields can be checked against
the national output for the same year.
The residuals include shale oil and oil
from some very small fields and three
large fields for which data are not avail-
able, plus or minus the cumulative errors
attributable to the impreciseness of Chi-
nese claims. In most of the years through
1969, shale oil and oil derived from
coal-perhaps as high as 34,000 b/d in
most years since 1959-account for a large
share of the residual. In some years,
notably 1962-64, the residual appears too
small to include both shale oil and the
output of the small fields. These were
years of recovery from the chaos of the
Leap Forward (1958-60), during which
statistical falsifications and confusion
were rampant, and estimates for individ-
ual fields-especially Ta-ch'ing-may be
too high. On the other hand, the confu-
Figure 7
Crude Oil Production
Million Metric Tons
National
Ta-ch'ing
Sheng-li
Ta-kang
Yu-men
Isaidaml
Residual
1949
1950
1951
0.121
0.200
0.305
0.121
0.200
0.305
1952
0.436
0.143
0.293
1953
0.622
0.198
0.424
1954
0.789
(0.239)2
0.550
1955
0.966
0.414
0.552
1956
1.163
0.533
0.630
1957
1.458
0.755
0.05
0.6,53
1958
2.264
1.002
0.25
0.03
0.982
1959
3.7
1.337
(0.239)
(0.044)
2.080
1960
5.1
0.792
1.700
(0.226)
(0.058)
2.324
1961
5.186
(1.022)
1.600
(0.214)
(0.072)
2.278
1962
5.746
(2.726)
0.046
(1.303)
0.201
(0.085)
1.385
1963
6.360
4.427
(0.321)
(1.006)
(0.307)
(0.099)
0.200
1964
8.653
(5.765)
0.596
(0.709)
(0.416)
(0.113)
1.054
1965
10.961
7.106
0.735
0.412
0.523
0.127
2.058
1966
14.074
8.776
2.0
(0.414)
(0.473)
(0.135)
2.276
1967
13.9
(9_045)
(2.625)
0.20
(0.416)
(0.423)
(0.144)
1.046
1968
15.2
9.297
(3.250)
(0.34)
(0.417)
(0.373)
(0.152)
1.371
1969
20.377
12.830
(3.875)
0.48
0.419
0.323
0.160
2.290
1970
28.211
17.666
4.5
0.96
0.490
0.384
0.165
4.046
1971
36.700
22.136
6.5
(1.64)
0.544
0.503
0.180
5.197
1972
43.065
25.550
8.45
(2.33)
0.620
0.604
0.320
5.191
1973
54.804
28.298
9.50
3.00
0.676
0.725
0.442
12.163
1974
65.765
34.608
11.02
3.74
0.710
1.036
0.530
14.121
1975
74.261
40.072
14.90
4.34
0.7853
1.0653
0.5823
12.517
1976
83.608
43,093
Total
503.994
273.209
68.318
17.030
16.842
8.335
3.438
3.679 BB
1.994 BB
0.499 BB
0.124 BB
0.123 BB
0.063 BB
0.024 BB
1. Actually consisting of three separate fields.
2. Parens indicate linear interpolation.
3. Regression analysis, 1969-74.
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sion and technical problems following the
withdrawal of technicians in 1960 may
have sharply depressed output of the shale
oil plants and the small oilfields.
40. The residuals for 1970-75 in-
clude the output of three large new fields
for which output data are not available.
Figure 10 sets a likely upper limit for
output by equating their output in 1975
with the capacity of refineries wholly or
25X1B
partially fed by each field." The 1975
41. To the output of the three
fields must be added the shale oil pro-
Figure 8
1975 Output at Significant Oilfields
North and Northeast
region
Ta-ch'ing
Sheng-li
Ta-kang
P'an-shan
Fu-yu
An-kuang
Yen-ch'ang
Far West region
K'o-la-ma-i
Yu-men
Tu-shan-tzu
Tash-arik
Leng-hu
Southern region
Ch'ien-chiang
Nan-ch'ung
Million Metric Tons
40.03
14.90
4.34
4.051
3.251
Less than 1
Less than 1
1_07
0.78
Less than 1
Less than 1
Less than 1
4.101
Less than 1
Thousand b/d
801
298
87
811
651
Less than 10
Less than 10
21
16
Less than 10
Less than 10
Less than 10
871
Less than 10
1. Likely upper limit.
Figure 9
Final Residuals of Crude Oil
National Crude Output
Final
Residuals
Million
Million
(Million
Residual as
Metric
Barrels
Metric
Percent of Na-
Tons
per Day
Tons)
tional Output
1970
28.21
0.564
-0.09
-0.32
1971
36.70
0.734
-0.89
-2.43
1972
43.07
0.861
-3.94
-9.15
1973
54.80
1.096
1.80
3.28
1974
6577
1.315
2.54
186
1975
74.26
1.485
-0.58
-0.78
duced annually at the Fu-shun Shale Plant
West (10,000 b/d), Fu-shun Shale and
Chemical Plant East (8,000 b/d), and the
Mao-ming Shale Oil Plant (10,000 b/d), as
well as the liquid oil produced from coal
at the Fu-shun Coal Liquefaction Plant
(6,000 b/d).
42. Figure 9 shows the final
residuals for 1970-75 after subtraction for
shale oil and for Fu-yu, P'an-shan, and
Ch'ien-chiang, and the percentages they
represent of the estimated national crude
oil production each year.
43. These final residuals represent
the output of 19 very small fields plus the
cumulative errors in the seven series in
Figure 7. The sign of the errors is not
important because of the impreciseness in
the original Chinese claims backing the
seven series. The size of errors-which are
less than 10 percent-is within the range
to be expected given the paucity of
Chinese official economic statistics.21 For
1975, the negative residual compared with
50,000 b/d for 1974 indicates that the
likely upper limits for the three fields
were larger than actual production.
Footnotes
25X1D 25X1D
17. Meyerhoff in his 1970 study listed 40 fields
confirmed and probable. 1
I. Discrepancies also arise
over the count of fields because some counts include
fields left out of other counts as too small to be
significant and because a single field by one count may
be split up into two or more fields in another count.
18. For derivation and sourcing of each series, see
Appendix D.
19. A refinery in or adjacent to a field is assumed to
be fed exclusively by the field. A refinery that is close
to a field but where it also could be fed by other fields
is assumed to receive half its crude from the field close
by.
20. For a discussion of these three fields, see para-
graphs 78, 84, and 89.
21. To sec how the national crude output estimates
since 1965 fit with estimates of refining capacity
, sec Appendix C. 25X1D
10
Figure 10
Likely Upper Limits of Crude Oil Production
at Selected Fields
Million Metric Tons
Field d
1970
1971
1972
1973
1974
1975
Total
2.44
4.39
7.43
8.66
9.88
11.40
48,800 b/d
87,800 b/d
148,600 b/d
173,200 b/d
197,600 b/d
228,000 b/d
Fu-yu
(1.15)1
1.44
2.58
283
3.08
3.25
P'an-shan
0A4
0.74
1.57
(220)
2.83
4.05
Ch'ien-chiang
(1.15)
(2_21)
3.28
3.63
397
4.10
1. Parens indicate interpolation or extrapolation.
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Approved For Release 2002/05/0egR-RDP90-01137R000100050008-6
III. Major Oilfields
Ta-ch'ing Oilfield (46-33 N,
/25X1C 12458E)
44. Ta-ch'ing is the core of the
Chinese oil industry, accounting for 54
percent of national output in 1975. Since
acknowledgement of its existence by the
Chinese media in the early 1960s, Ta-
ch'ing has been trumpeted as a synonym
for industrial achievement through self-
reliance. "Emulate Ta-ch'ing" campaigns
are a staple of Chinese industrial life.
45. The truth, however, is that the
exploration which located the field was
carried out under the guidance of Soviet
and East European technicians. During
1960, the first year of production at the
field, all Soviet technicians withdrew from
China. Alone, the Chinese required 5
years to bring the field to an annual
output of 116,000 b/d, 10 years to
256,000 b/d. The technology used in
developing the field during its first decade
was entirely Soviet or East European.
46. Ta-ch'ing is i.n Heilungkiang
Province, in the northern half of the
Sung-liao Basin. The reservoirs are a num-
ber of sandstone strata on a very broad
arch. Meyerhoff reports the field as con-
sisting of more than 22 Mesozoic (Lower
Cretaceous) sandstone reservoirs at depths
as great as 1,500 meters. The developed
areas (see Figure 11) representing the field
cover 1,180 km2.
47. The Sung-liao Basin itself is
some 150,000 km2 in area and is charac-
terized by broad, gently dipping arches
and domes. Other existing fields in the
Basin are at Fu-yu, An-kuang, and Shen-
yang. Figure 11 depicts the chronological
development of sections of Ta-ch'ing
along with the major facilities in place as
of early 1976. The initial geological sur-
vey took place in 1951 and exploratory
drilling began in 1959. The growth of
5X1D facilities, has
been as shown in Figure 12.
48. Unlike most Chinese fields,
Ta-ch'ing is almost all one continuous
area. Not until 1975 did a detached area
come under development (see Figure 11).
The difficulties encountered at the field
were primarily from inexperience and the
harsh winter weather. Wells are reportedly
at easy depths of 305-1,370 meters.
1 he
one crisis admitted by the Chinese in
management of the field took place
during the early stage, when water injec-
tion was commenced prematurely and led
to migration into unintended areas. An
ntensive underground mapping program
-cl the problem. There are a minimum
9 wells, most drilled by 1962, which
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SECRET
are possibly injection types.
25X1C
49. The crude oil produced at Ta-
ch'ing is a consistent high-paraffin, low-
sulfur, light-medium variety. The crude
analysis appears in Figure 13.
50. Almost 120,000 b/d, or about 15
percent of 1975 output, was refined
onsite. The main refinery, at Sa-erh-t'u,
has a capacity of 84,000 b/d; the smaller
units at La-ma-tien and Ching-chia-wei-tzu
are of 14,000 b/d and 20,000 b/d capac-
ity, respectively. Most of the field's out-
put goes out by dual pipelines built from
pre-1972 through 1975. (See Figure 15)
One pipeline traverses the Manchurian
valley, serving the urban and industrial
concentrations along the way, passes
through the port of Ch'in-huang-tao, and
continues south of Peking to one of
China's largest and most modern refinery-
petrochemical plants, at Fang-shan. The
other pipeline also traverses the Man-
churian valley, but diverges at T'ieh-ling
to go through the Liao-tung Peninsula to
the two ports at Lu-ta, at one of which
facilities were completed in mid-1976 for
berthing 100,000 DWT or larger tankers
in support of oil exports.' 2
5 1. Ta-ch'ing is also served by
seven rail transfer points. The railroads
probably hauled as much as
300,000-400,000 b/d of oil from Ta-
IllIllyvoolool
Ta?ch'ing Oilfield
area of concentrated development
DEVELOPMENT DATE
MI Feb 1962
Jun 1971
El Dec 1975
A Drilling rig
? Pumping station
Oil pipeline
Gas pipeline
Scale 1:500,000
0 5 10 1 5 KilornelarS
I , '
0 5:10
15 Mlies
Shih-chia-h-fong-tzu
\
mder f citify
/1,ung4eg
5a-ern t'u
refin
Wong-chi -wei-tzuZ,
,
ao-w chs
0
/
4-6z3o'
An-ta-hsien
Seng -ping
SECRET
NOFORN
Approved For Release 2002/05MMIA-RDP90-01137R000100050008-6
ch'ing before 1974. The pipelines have
pushed rail transportation into the back-
ground.
52. Ta-ch'ing supplied 85-90 per-
cent of all Chinese crude exports in 1975.
Abroad, the crude is considered trouble-
some to refine as a distinct type unless
equipment especially designed for it is
built. The Japanese either send Ta-ch'ing
crude to steel and powerplants for fuel or
blend it with other crudes before refining.
The nitrogen content of the crude con-
cerns Japanese fuel users anticipating
more stringent legal restrictions on nitro-
gen-oxygen compound emissions. More
than 94.9 million barrels have been deliv-
ered to Japan since late 1973 at prices
ranging from less than $3 in 1973 to more
than $14 during the Arab embargo crisis.
The late 1976 f.o.b. price was $12.30,
lower than similar Indonesian crude for
Japan but higher than OPEC.25X1D
53.
Facility development within
the northern and south-central portions
was also continuing, with the connection
of 146 new wells and 12 separation
facilities to the gathering system. In the
south-central portion of the field, 24
older wells were connected to new, larger
diameter gathering lines.
54. As oil output has increased at
Ta-ch'ing so has gas output. The separate
northern section of the field may be gas
pressurized and producing without water
injection. Gas originating here is partially
flared and partially sent to a nearby
nitrogen fertilizer plant. The Ta-ch'ing
field as a whole produces enough gas as a
byproduct to fire equipment and heat
pipes and workers' quarters exclusively
with gas. The regime since 1975 has
shown increasing concern to profit more
from the gas from Ta-ch'ing and other
oilfields, either by piping more to cities
and industrial plants or by liquefying it
for export.
55. Ta-ch'ing's annual rate of in-
crease in output has been falling off,
suggesting that the growth rate has passed
its peak. Since 1972, only during 1974
did the increase match or exceed the
average annual rate of about 20 percent
that had prevailed since 1963, when
production at Ta-ch'ing settled down after
several years of frantic preparatory
development efforts.
Sheng-li Oilfield (37-30 N,
11 8-30 E)
25X1D
56. Eighteen active areas totaling
565 km2 scattered along both banks of
the mouth of the Huang Ho and five areas
totaling 119 km2 near Lin-i at the base of
the Shantung Peninsula, are designated as
one oilfield, Sheng-li, by the Chinese (see
Figure 20). Discovered not long after
Ta-ch'ing and reportedly possessing re-
serves of comparable size, Sheng-li has
been developed much more slowly. After
14 years, production at Sheng-li reached
300,000 b/d, whereas Ta-ch'ing attained
an annual output of 800,000 b/d after 16
Figure 12
Ta-ch'ing Oilfield
Separation Facilities
Drilling Loca-
Rigs Wells titans'
Field
Storage
Central Areas
Feb 62
218
2
6
1
0
Jun 71
17
2,872
57
92
10
8
Jun 75
10
3,942
173
157
15
10
Dec 75
7
4,069
176
169
15
10
1. Drilled or being drilled but no wellhead or gathering line yet in evidence.
Figure 13
Crude Analysis
Ta-ch'ing Crude Oil
Product Yield (% vol)
?API gravity
32
Liquid petroleum gas
0.2
Specific gravity
0.8588
Light naphtha
5.4
Pour point, ?C
32.2-35
Naphtha
3.7
Salt content, % vol
0.001-0.003
Kerosene
4.7
Sediment, % vol
0.2
Gas oil
6.9
Sulfur, % wt
0.06-0.14
Heavy gas oil
7.0
Wax, hexane, % wt
22_4
.Residuum
68.0
Nickel, calculated PPM
3.2
Water
2.6
Nitrogen, PPM
1,600
Loss
1.5
Vanadium, calculated PPM
0.1
12
years. Nevertheless, Sheng-li in 1975 was
by a wide margin China's second largest
oilfield, accounting for 20 percent of total
crude output.
57. Geologically, Sheng-li and its
neighbors?Ta-kang and P'an-shan oil-
fields?are in the North China Basin in one
of a series of grabens extending east-
northeast to west-southwest and northeast
to southwest across the North China
Plain. Production is from Miocene-
Pliocene and Upper Tertiary strata where
a wide variety of stratigraphic traps are
situated. Wells are reported to be
1,800-5,000 meters deep. Meyerhoff esti-
mates depth to basement at probably
4,200 meters with the maximum thick-
ness of the Tertiary section at 775-4,100
meters. One of the producing areas?near
Chun-hua?has a limestone oil-producing
stratum. Another location reportedly
yielded radioactive material and had to be
shut in. Meyerhoff believes there is a
possibility of some marine deposits in the
North China Basin, but Terman suggests
that all deposits, including possible lime-
stones, are lacustrine in origin.
58. Figure 20 depicts the chrono-
logical development of each of the areas
along with the major facilities in place as
of yearend 1975. The growth of facilities
25X1D 25X1D
59. Sheng-li's development might
have been faster had not Ta-ch'ing been
given priority in money, skilled
manpower, and equipment. As late as
1975, Sheng-lfs equipment and safety
practices were still appallingly poor, ac-
cording to foreign oil company visitors
conditioned by the better situation they
had seen at Ta-ch'ing. The resources re-
quired for building Sheng-li could not
have been less than for Ta-ch'ing. The
Shantung Peninsula weather also is severe,
the underground formations to be located
and mapped evidently are more complex,
dikes had to be built to reclaim land along
the marshy shoreline of the Huang Ho
delta, and drainage had to be maintained
during rainy seasons.
60. Chinese briefers at Sheng-li ac-
knowledge operational problems to for-
eign visitors. They say that drilling is
"troublesome," with formations "sud-
denly soft and suddenly hard." Small
reservoirs are spread out in unpredictable
patterns in the widely scattered active
areas. Underground permeability and pres-
sure conditions vary. In production, some
reservoirs are pumped, some water-
injected, and some fractured or acidized
to promote a flow of oil through the
reservoir rock.'
thefield's manag
ment and personnel are still overwhe
by the problems related to inconsi
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in characteristics of oil produced and
water and salt removal.
61. In Figure 17 the average anal-
ysis of Sheng-li crude has been culled
from reports of international oil com-
panies that have bought or received sam-
ples of Sheng-li crude.
62. Sheng-li briefers say that their
crude yields atmospheric distillates of
only 15-23 percent, even worse than
indicated by the analyses by foreign oil
companies.
63. Sheng-li has three associated re-
fineries. The Wang-chu-chuang complex of
90,000 b/d annual capacity handles part
of the output of the producing areas in
the Huang Ho delta. The Chi-nan Re-
finery, which has a capacity of 34,000
b/d, and the Chi-nan Li-cheng Refinery,
capacity 20,000 b/d, under construction,
Figure 16
Drilling
Rigs
Wells
Sheng-li Oilfield
Locations'
Separation Facilities
Field
Central
Storage
Areas
(1)2
(2)3
(1)
(2)
(1)
(2)
(1)
(2)
(1)
(2)
(1)
(2)
Jun 64
3
3
3
2
Dec 69
1
1
Nov 70
35
465
134
12
11
3
Dec 70
2
1
7
Oct 71
2
3
11
Oct 72
15
16
26
3
1
0
Nov 73
67
1,079
249
39
19
5
Apr 74
16
54
35
9
1
0
Dec 75
56
25
1,299
107
285
63
61
13
20
3
6
0
1. Drilled or being drilled but no wellhead or gathering line yet in evidence_
2. (1) indicates areas at Huang Ho delta.
3. (2) indicates areas around Lin-i.
Figure 17
Crude Analysis
Sheng-li Crude
Product Yield (% wt)
'API gravity, 15.6 ?C
Specific gravity, 15.6 ?C
20-24.61
0.9185
Liquid petroleum gas
Light naphtha
Pour point, ?C
12-28.3
Naphtha
7.3
Sulfur, % wt
0.88-1.35
Kerosene
5.0
Salt, % vol
0.02-0.07
Gas oil
9.6
Water, % vol
0.7-2.0
Heavy gas oil
Nitrogen, PPM
5,100
Residuum
77.1
Paraffin, % wt
15.3
Water
Loss
1.0
16
25X1D
are inland and probably handle primarily
the output from the Lin-i area. At the
refineries, residuum is fed to a vacuum
distiller and the vacuum residuum is used
to make asphalt. The vacuum distillates
are fed to catalytic crackers. Dry gas and
liquid petroleum gases from the refining
process become fuel and raw materials for
ammonia synthesis.
64. Sheng-li is served by three rail
transfer points (see Figure 18), a com-
pleted pipeline to the port of Huang-tao,
which serves primarily coastal tanker traf-
fic, and a pipeline not yet completed to
Nan-ching. Sheng-li crude also is distrib-
uted to the farthest reaches of south
China.
65. About 14.6 million barrels of
Sheng-li crude have been exported since
1974. All but a few hundred thousand
tons went to the Philippines. Romania is
the other customer of consequence. Lab-
oratory size samples measured in barrels
have been sent to Australia and New
Zealand. Sheng-li crude sells in the range
of 57-89 a barrel. The price reflects its
true worth, given its poor product yield
and high content of paraffin and other
impurities. So far, Japan, New Zealand,
and Australia have refused to buy it
despite the price. The Philippine govern-
ment resells its Sheng-li crude at a profit
to oil companies operating in the country,
who in turn use it to fuel furnaces.
66. As of December 1975 consider-
able expansion was under way at Sheng-li.
In the Huang Ho delta, areas 1 through 16
(as designated in Figure 20) were in
production. Step-out drilling to define
boundaries of located reservoirs was under
way in areas 2, 3, 6, 9, 11, 12, 14, and 16.
Additional production wells were being
drilled in areas 2, 3, 6, 8, 14, 15, and 16.
Most exploratory activity was in areas
north and southwest of area 6. In the
area, three older producing areas
showed no evidence of expansion. In the
area east-northeast of the original field,
production and step-out wells were being
drilled and separation and gathering facil-
ities were under construction.
67. Sheng-li's annual rate of
growth has been more erratic than for
Ta-ch'ing or for the oil industry as a
whole. The increase of 35 percent in 1975
compared with 16 and 12 percent for
1974 and 1973, respectively. A 44 percent
rate of growth was achieved in 1971.
Nevertheless, reserves are large enough so
output should grow rapidly for some
years to come,
Ta-kang Oilfield (38-43 N,
117-33 E)
68. Ta-kang and Sheng-li are desig-
nated separate fields by the Chinese, but
the clusters of active areas that make up
each field are only 50 km apart and share
practically identical geology. Meyerhoff
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SECRET
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SECRET
NOFORN
Figure 20
Sheng-li Oilfield
area of concentrated development
DEVELOPMENT DATE
Ns Jun 1964
[M Nov 1970
7] Oct 1972
Apr 1974
77 Dec 1975
I I
? Drilling rig
? Pumping station
? Oil pipeline
? Gas pipeline
5
5001e 1:568,000
15 Kilometer.
5
0
110 15 miles
380
:1=7.
PrO?HAI
) \
1-ho-chuang
chia-wu-tzu
Huang Ho mouth,
summer 1976
CHAN-H AA
u-116-c
/
/
77-
urLip-Wc,144-,,c1:1J),9
/
,
(Lik.,?-,5/1-r,6rjen-chunn
Shih-k?ov
371.
IOU-CHEN
)YANG-HO-
AN TS UN)
LINT
to Wang- hu-chuang
fertilizer lant
to ani-chu-chuang
ine
SHO-KUA
OLI?CHAI
._
/
C hl -C1710 -c411.1 \
y /
- -??,> ( --- ' )r
/ -',-, ,
i
CH'AN
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\ '.... )
?
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19
SECRET
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nect the various producing areas of the
field to all the refineries except at Pao-
ting (see Figure 26). Ts'ang-chou, Yang-
liu-ch'ing, and Pao-ting have rail transfer
facilities.
76. Of the 12 areas designated on
Figure26, as of January 1976, areas 2, 3,
4 6, 9, 10, and 11 were in production.
25Xlai
3-Lep-out drilling was under way on the
perimeters of areas 2, 3, 4, and 6. Areas 2
and 12 appeared to be expanding rapidly
and areas 1 and 5 expanding at a slower
pace.
The Mystery Oilfields: Ch'ien-
chiang, P'an-shan, Fu-yu
77. These are the fourth, fifth, and
sixth largest oilfields in China. They each
4-5 percent of 1975 na-
accounted for
2igure 22
Ch'ien-hsi
, (Hsing-ch'eng
tional output; thus each is only slightly
smaller than Ta-kang in output. None of
the fields has ever been discussed in the
Chinese media.
Ch'ien-chiang
78. Ch'ien-chiang Oilfield (30-28
N, 112-45 E) is just north of the Ch'ang
Chiang in central Hupeh Province. Ch'ien-
Chiang's location is particularly important
because oil can be transported to the
southern provinces at lower cost than is
the case for any other large field. The
other known fields in or near the south
are the Nan-ch'ung field in Szechwan
Province, which probably produces less
than 20,000 b/d, and the small shale oil
field at Mao-ming at Kwangtung Province.
79. Ch'ien-chiang has been in exis-
tence for at least eight years. The secrecy
surrounding the existence of the field
probably reflects Chinese uncertainty over
its long-term prospects. Possible causes of
this uncertainty are a low amount of
identified reserves or high costs of exploi-
tation because of geological features of
the field. In any event the field's prime
location relative to the oil-deficient south
provides a strong inducement to exploit
reservoirs that might be judged marginal
in the north and northeast.
80. Nothing is known about the
geology of Ch'ien-chiang. The Soviet geol-
1Peng-j6h
.Fu-fling ..--Cilig-htiagg-t 0
Luan-hsien!
Tang-shan
Luan-nan?
(Pen-ch'eng)
Ch' ng-II
Jack-up platforms
Jan. 197
P o, h a i
Wan
6Hung71',Iua
.Merig-ts'un
503182 1-77 CIA (543158)
20
0
Po Hai
Offshore Oil
Exploration
0 Drilling platform
in place Jan 1976
with date first sighted
Scalia 1:2,000,000
ap Kilometers
40 Miles
119 SECRET
20
NoFoRN 1 Offshore drilling in Po Hai
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SECRET
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