By Wang Yu (China Daily)
Updated: 2007-08-15 09:40

PetroChina's largest oil discovery in a decade boasts more reserves than estimated, it was confirmed yesterday - a shot in the arm for both the company and the country's energy security.

Jidong Nanpu Oilfield in the Bohai Bay has combined proven, probable and possible reserves of as much as 1.18 billion tons of oil equivalent, the Ministry of Land and Resources of China certified yesterday.

The proven reserves are certified at 445 million tons oil equivalent.

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PetroChina originally estimated Nanpu's three-level reserves to be around 1 billion tons of oil equivalent, with proven reserves in place reaching 405 million tons.

"The confirmation proves the effectiveness of advanced technology in exploration and production," Han Xiaoping, an analyst with energy portal China5e.com, told China Daily. "It is a big incentive for more exploration."

Han contended that like in the case of Northeast China's Daqing Oilfield, it is possible for even more reserves to be discovered at Nanpu Oilfield and around Bohai Bay at large, with increased exploration.

The reserves at Daqing, the country's top oilfield, were initially thought to be 2.2 billion tons, but eventually turned out be to 5 billion tons following intense exploration efforts.

A source with China National Petroleum Corporation (CNPC) Consulting Center agreed with Han.

"It is likely that more reserves are discovered at Nanpu Oilfield. In fact, the offshore areas in Bohai Bay are bound to have a larger potential, given the geological features," the source told China Daily.

CNPC is the parent company of Hong Kong-listed PetroChina, the country's top oil and gas producer.

Yin Xiaodong, an oil analyst at CITIC Securities Co, commented that although the increase in reserves may not necessarily add weight to PetroChina's earnings per share in the short term, it is positive for PetroChina in the long run.

PetroChina's proven developed and undeveloped reserves at the end of 2006 reached more than 20.5 billion barrels (2.8 billion tons) of oil equivalent, according to the firm's annual report. The newly certified reserves at Nanpu Oilfield will increase the firm's reserves by more than a third.

The reserve certification was done by independent oil experts from Sinopec, China National Offshore Oil Corporation and the Ministry of Land and Resources. It is international practice for reserve certification to be done by third party members to ensure authenticity, Han explained.

More reserves discovered at home will reduce the country's dependence on imports, Han pointed out.

In tandem with fast economic growth, the demand for oil is picking up rapidly.

The country's oil dependency, or the proportion of imports in total oil consumption, went up 4.1 percentage points year on year to 47 percent in 2006, according to the Ministry of Commerce.