China has commenced operation of its deepest mobile oil rig in the northern rim of South China Sea, to extract marginal resources amid its growing emphasis on energy security and technological self-reliance.
The offshore home-grown rig is located in the Enping oilfield, about 200km (124 miles) southwest of Shenzhen city, state broadcaster CCTV said on Saturday.
Developed by the state-owned China National Offshore Oil Corporation (CNOOC), the rig has a drilling capacity of 9,085 metres, with 8,689 metres being horizontal, making it the deepest and longest China has drilled, the report said.
The oil rig, dubbed the Enping 21-4 A1H wellhead platform, can produce 700 tonnes of oil per day after testing, CCTV said.
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China’s leadership has been stepping up efforts to reduce its dependence on imported oil and gas amid escalating geopolitical uncertainties, including exploring more local oil resources and upgrading its oil-extraction technology.
The Enping oilfield is a marginal field with thin reservoirs and a remote location, making it challenging to achieve sufficient net income and meet profitability targets under traditional vertical drilling methods.
CNOOC has applied horizontal drilling technology to access oilfields more than 8km away, to overcome these extraction barriers and save costs, according to Guo Yongbin, chief engineer of the company’s Shenzhen branch.
“By applying this [horizontal drilling] technology, we can access oil and gas resources within 10km of this oil rig in the future, which will significantly improve the efficiency of China’s oil and gas field development,” Guo was quoted by the state broadcaster as saying.
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The rig can carry 669 pieces of pipe, weighing a total of 564 tonnes, into the oilfield by navigating through three underground faults, and CNOOC said that such operations are at a world-leading level.
State media said deep-sea, marginal-oil-drilling technology is becoming increasingly crucial for China as global demand for crude oil continues to rise, while traditional and easily accessible oil and gas resources are decreasing.
CNOOC, China’s major offshore oil and gas exploring company, put its Enping 15-1 oil rig into operation in December 2022. The oil rig can reportedly produce up to nearly 5,000 tonnes of oil per day, and this is said to make it the largest offshore oil rig in Asia.
The state-owned company launched the Enping 18-6, another oil platform, into production in October. CNOOC said it could reach peak daily production of about 9,300 barrels of crude oil in 2024.
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As an industrial powerhouse, China is seeing growing oil demand, yet it relies on imports for 70 per cent of its crude oil, leaving it vulnerable to potential price shocks under supply fluctuations.
China imported 564 million tonnes of crude oil last year – up 11 per cent from a year earlier – mainly from Saudi Arabia and Russia, according to Chinese customs.
Its oil reserves totalled about 3.8 billion tonnes in 2022, accounting for about 1.58 per cent of global reserves, and ranking 13th in the world, according to the most recent data from the Ministry of Natural Resources.
The reserves amount to only 9 per cent of those of top-holder Venezuela, and 10 per cent of those of second-ranked Saudi Arabia.
