There are more than 20 major sedimentary basins onshore China. Significant hydrocarbon production is currently limited to only a few of these basins including the Songliao, Bohaiwan, and Junggar basins. Exploration results in some of the other interior basins has been disappointing, while in others activities have been limited as a result of their remoteness.

Much of the resources within the producing basins were derived from lacustrine systems and often found in nonmarine sandstones. The oils found are often waxy and reservoir properties poor, with limited vertical and lateral continuity. Consequently, although field sizes may be large, flow-rates from individual wells may be limited and a large number of wells are required to capture the reserves. For example, the Daqing field (Songliao basin) had initial reserves of more than 8 billion barrels of oil and is producing ~1 million bbl/day, but contains more than 10,000 wells. Similarly, typical flow-rates from vertical wells in the Shengli petroleum province (Bohaiwan basin) are less than 700 bbl/day. Recent horizontal wells in the Shengli field have shown significant improvements in production rates, with individual wells achieving rates in excess of 5000 bbl/day.

An examination of the less explored basins suggests that many of the key components of petroleum systems are present. For example, in the Tarim basin multiple marine and lacustrine source rocks have been identified, as have been both clastic and carbonate reservoirs ranging in age from Cambro-Ordovician through Paleogene. Active seeps have also been observed within the basin and more than 240 structural targets identified, with over 140 having surface expression. The primary exploration challenges in many of these basins appear to be associated with relative timing, preservation of hydrocarbon accumulations, and communication between the generative basin and the trap.

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