China Petroleum & Chemical Corp (Sinopec), the nation's second-largest oil and gas producer, said it had made an oil discovery that analysts estimated could raise its reserves by between 4 and 15 per cent.
It found the pool in a newly explored area of the company's Tahe oil field in Xinjiang, with the site covering 899.5 square kilometres. The geological reserves were estimated at 140 million tonnes to 200 million tonnes, company newsletter Sinopec News reported.
That would translate into 1.02 billion to 1.47 billion barrels if all the crude can be pumped out.
Analysts said the final proved reserves that could be booked were highly uncertain as more appraisal wells needed to be drilled to better ascertain the amount of economically recoverable reserves and subsequently proved reserves.
Using an industry norm recovery rate of 30 per cent, CLSA director of China oil and gas Gordon Kwan estimated that 300 million to 500 million barrels might be recovered.
This amounts to 9.4 per cent to 15 per cent of the company's 3.29 billion tonnes of proved oil reserves at the end of last year, based on its filing to the Securities Exchange Commission of the United States, where it is listed.