Sinopec reports huge oil reserve find in Tahe

China Petroleum & Chemical Corp (Sinopec), the nation's second-largest oil and gas producer, has made a giant oil reserve discovery at its Tahe oilfield in Xinjiang, but it warned the preliminary data provided little clarity about future output potential.

Even if the reserve proved to be sizeable in the future, it might fetch less than average prices in the market given the higher sulphur content of oil in Tahe and the longer distances to transport it to markets, analysts said.

At the end of last year, the field contained 1.73 billion tonnes of oil equivalent in oil and gas geological reserves. About 745 million tonnes were proven and the remainder either probable or possible reserves, reported Sinopec News, a publication run by parent China Petrochemical Corp.

'The figures are only preliminary and have yet to be audited by the National Reserves Audit Committee and our independent auditor based on standards set by the Securities Exchange Commission [of the United States where it is listed],' a Sinopec spokesman said. 'They are of limited value for investors.'

Reserve recognition takes years to complete, as oil explorers need to drill appraisal wells to increase the confidence level at which reserves are indicated to exist after initial exploration drilling.

Generally, only 30 per cent to 40 per cent of geological reserves can eventually be booked as proved.

Rival PetroChina announced in May last year a huge discovery in Nanpu, near Tianjin.