PetroChina Changqing Oilfield Company, a regional branch of China's top oil and gas producer Petro-China, announced earlier that it had discovered new geological reserves of 1 billion tons of shale oil at its Qingcheng oilfield in the Ordos Basin, among which 358 million tons had been proved.
That amount is equal to almost three times the refined oil China consumed last year, which was about 325 million tons, according to data from the National Development and Reform Commission.
During the same period, China's crude oil production was only 189 million tons, 1.3 percent down compared with that in 2017, according to a report released in April by the China Electric Power Planning and Engineering Institute.
"The newly announced geographic oil reserves in Qingcheng add a large amount to China's total oil reserves, which means a higher chance for China to significantly increase domestic oil output and reduce foreign oil reliance," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.
The new geographic oil reserves of 1 billion tons, even though not all of them could be proved or extracted presently, could greatly improve China's ratio of proven oil reserves to annual production, which was only about 10 before the discovery, Lin said.
China, the world's second largest oil consumer and largest oil importer, imported 440 million tons of crude oil in 2018, a year-on-year increase of 11 percent, with its foreign oil dependency ratio reaching 69.8 percent, according to China National Petroleum Corp's Economics and Technology Research Institute.
Lin also said the new discovery will spur industry's confidence in domestic oil detection and exploitation, as it proved China has been scaling up technologies for production and use of unconventional oil.
With more investment inflows into unconventional oil sector, as shown by the case of Changqing oilfield, the production costs of unconventional oil will be reduced very quickly and will ultimately contribute largely to domestic crude oil output, he said.
The company said Qingcheng oilfield has been stepping up the drilling of wells since 2017. So far it has completed the drilling of 216 horizontal wells, among which 100 have been put into use, with daily crude oil production reaching 1,464 tons.
The company said the oilfield will finish drilling 255 horizontal wells by the end of 2019, forming an annual crude oil production capability of 1 million tons.
By the end of 2025, the annual crude oil production capability at the oilfield will hit 5 million tons, the company said.
Luo Shunshe, a professor with the School of Earth Sciences at Yangtze University in Wuhan, Hubei province, said China's exploitation of unconventional oil resources is catching up quickly.