New deep CBM field discovery to hike output

The discovery of China's first deep coal-bed methane field with proven geological reserves exceeding 110 billion cubic meters will further facilitate the growth of the country's reserves and production of unconventional oil and gas, an analyst said.

China National Offshore Oil Corp announced the discovery of the Shenfu deep CBM field, located in Yulin, Shaanxi province, at the eastern edge of the Ordos Basin, on Monday. This is China's first large deep CBM field of such scale.

The discovery lays a solid foundation for China to build a large onshore gas production base, said Li Ziyue, an analyst with BloombergNEF.

"Coal-bed methane has been playing an increasingly important role in gas supply security in China. In the first three quarters of this year, coal-bed methane production saw a year-on-year growth of 17 percent, which accounts for 6 percent of total domestic gas output," she said.

Against the backdrop of a global energy crisis, it is necessary for domestic oil and gas companies to step up efforts in upstream exploitation and exploration, she added.

The discovery well SM2-33-CH1 encountered 16.5 meters of coal seam at a depth of about 2,011 meters, which has been tested to produce around 19,000 cubic meters per day after fracturing operations, CNOOC said.

CBM refers to natural gas that is stored within coal seams, and those found at depths exceeding 1,500 meters are referred to as deep CBM. China has abundant CBM resources, with those at depths within 2,000 meters exceeding 30 trillion cubic meters and deep CBM accounting for about one-third of this total, CNOOC said.

This is another major onshore discovery by CNOOC after a discovery made in Linxing, Shanxi province, with similar proved gas inplace volumes.

Developing and utilizing CBM not only ensures coal mining safety, but also provides a new source of clean energy. Currently, the commercial-scale development of CBM in China is mainly in the Qinshui Basin and the Ordos Basin.

Xu Changgui, deputy chief exploration engineer of the company, said the discovery demonstrates the broad prospect of exploration and development in the eastern edge of the Ordos Basin.

"The discovery provides important guidance for exploration in similar basins and facilitates the growth of our reserves and production of unconventional oil and gas," he said.

CNOOC said it would continue to strengthen technological innovation and research efforts to explore new technologies for the efficient development of CBM in China, to ensure sufficient gas supply in the country.