Should Opec worry? China joins US shale oil revolution with deep fracking breakthrough
Jimsar shale oil demonstration zone in Xinjiang has reached its annual crude output goal of 1.7 million tonnes 22 days ahead of schedule
That would see China join the United States, whose shale boom earlier this century enabled it to become the largest crude oil producer in the world. This fundamentally altered the international oil market, with significant impact on oil exporters, particularly members of the Organisation of the Petroleum Exporting Countries (Opec).
The boom weakened Opec’s market power with a steady supply of crude oil, as global resources of unconventional oil, such as those trapped in shale rock, far exceed conventional oil reserves.
China has its own vast shale potential – the largest recoverable shale gas and third largest recoverable shale oil reserves in the world, according to the US Energy Information Administration (EIA).
As the world’s largest crude oil importer, China’s commercial exploitation of its shale reserves could threaten Opec and its allies. However, accessing these formations, buried deeper than those found in the US, has presented a significant challenge.
On Tuesday, the Jimsar shale oil demonstration zone in Xinjiang – China’s first such national-level zone – reached its annual crude oil output goal of 1.7 million tonnes 22 days ahead of schedule.