Development and Prospects for China’s Oil and Natural Gas
Chapter 2: The Geological Basis of the Onshore Oil and Gas Industry
2. The geological basis of the onshore oil and gas industry In order to evaluate the past and to understand the present issues in China’s oil and gas industry, we need to consider in more depth the resources nature has given China on which to base this industry. As China moves from an oil surplus to oil deﬁcit economy, with all the economic and strategic implications of this change, this issue becomes pressing. It is important to know whether present problems reﬂect short-term diﬃculties or whether they reﬂect a fundamental shortfall in the raw energy resources available for Chinese development. THE NATURE OF OIL AND GAS RESERVES Estimation of oil and gas reserves is a complicated matter. Such reserves are a complex of hydrocarbons which may manifest themselves in a variety of forms and mixtures. Typical crude oil ﬁelds are a mixture of oil, gas and water, often held within porous rocks. If structures with permeable or porous rock extend to the surface, then leakage and loss will occur, and the reserves will not be contained. The best oil ﬁelds are, therefore, hydrocarbon-bearing formations that are themselves contained in nonpermeable rock formations. Such oil ﬁelds are thousands of metres deep, at which point there is the ideal combination of oil- and gas-impregnated materials bounded in caverns of impermeable materials. Since gas is lighter than oil, and oil lighter than water, on drilling one typically ﬁnds ﬁrst gas, followed by oil and then water. Initial prospecting therefore...
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