China puts Nanpu reserves at 7 billion barrels

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BEIJING, Oct 20 (Reuters) China's resources ministry has confirmed that PetroChina's Jidong Nanpu oilfield holds more than seven billion barrels of crude, a top official said on Friday, matching the company's own early estimate.

Vice Minister Wang Min, responsible for energy resources, said there could be more big finds as China seeks to expand recoverable oil reserves of 22.5 billion tonnes and increase annual production to 200 million tonnes by the end of the decade.

''(Nanpu's) reserves are 1 billion tonnes (7.3 billion barrels),'' Wang told Reuters when asked about the field's deposits -- for which there have been varying figures -- although he did not comment whether this was proven or probable.

PetroChina's parent CNPC said in May that Jidong Nanpu contained total oil and gas reserves of 1 billion tonnes, ranking it among the world's biggest finds this decade.

The listed company has since put proven deposits at a more cautious 405.07 million tonnes, but its Vice President Jia Chengzao said last month he hoped this would rise to between 1 billion and 1.6 billion tonnes of oil equivalent.

Adding to confusion about the size of the field, the Chinese government agency that certifies reserves said this summer the field contained 445 million tonnes of ''proven reserves'', with commercially recoverable reserves of just 86.6 million tonnes.

Chinese government and industry reserve estimates often differ significantly from those in the West, where they are governed by strict definitions that make clear how much of a field's oil is expected to be produced over its lifetime.

RESERVE EXPANSION DRIVE China, the world's number two oil consumer, is pushing its companies to invest in exploration to help curb a growing dependence on imports and hold off output decline at its two largest fields, which have both been pumping for decades.

Wang said the Nanpu find was a reminder of the potential even in areas that had already been looked at by oil firms.

''Nanpu was always there,'' Wang said in an interview on the sidelines of a Communist Party Congress in Beijing.

''But it was always an unexciting, small oilfield. Originally everyone was focused on 3,000 metres, or below 3,000 metres, they had not thought about the shallow areas.'' The ministry estimates that the country's total reserves in place could be as high as 90 billion tonnes, and hopes to add 900 million tonnes to that number every year -- with a corresponding increase in production, he said.

Last year Chinese output was 184 million tonnes, making it the world's sixth largest oil producer.

But foreign crude already meets nearly half the country's needs and oil consumption is growing faster than domestic production. Western analysts have said that China's output could peak soon, although the government is more optimistic.

''At current levels, and according to current knowledge, we can keep production at 200 million tonnes for around 30 years, with a peak of 220 million tonnes,'' Wang told Reuters.

''But if there is a new breakthrough, who knows?'' Asked if any major new announcements were likely this year, he declined to comment directly.

''Lately there has been a lot of good news about oil and gas, but when it reaches us, we can't just talk, we have to fully explore, test and evaluate before officials certify it,'' he said.


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