China Shale Gas and Shale Oil Resource Evaluation and Technical Challenges

Abstract China has abundant organic-rich source rock shales which are prospective for commercial shale gas/oil development but still in the early phase of evaluation and testing. We analyzed petroleum source rock data published in nearly 400 Chinese language papers to construct a unique GIS data base of shale geologic and reservoir properties throughout the country. We then conducted a comprehensive assessment of the country’s shale gas and shale oil resource potential. China’s risked technically recoverable resources within high-graded prospective areas are estimated at 1,115 Tcf of shale gas and 32 BBO of shale oil resources (Table 1). Of the dozen onshore sedimentary basins that were assessed, the most prospective are Sichuan, Tarim, Junggar, and Songliao. One of the most intriguing prospects is liquids-rich Permian shale on the structurally simple northwest flank of the Junggar Basin. The Pingdiquan/Lucaogou lacustrine shale is about 250 m thick and 3,500 m deep here. TOC averages 5% and the shale is oil- prone (Ro 0.85%). The area is close to infrastructure. Table 1Estimated Shale Gas and Shale Oil Resources in China The Sichuan Basin, industry’s primary focus for shale gas, has multiple shale targets but also significant geologic challenges, such as numerous faults (some active), often steep dips, high tectonic stress, slow drilling in hard formations, and high H2S and CO2 in places. Tarim Basin shale targets are mostly too deep (5 km) apart from uplifts where they may be thin with low TOC. The Songliao Basin has liquids-rich potential in over-pressured and naturally fractured Cretaceous lacustrine shales. However, China’s shale oil deposits tend to be waxy and stored mainly in lacustrine-deposited shales, which may be clay-rich and less "frackable" than the low-clay brittle marine shales productive in North America.