China Expands Offshore Drilling Activities

    China is expanding its offshore drilling activities as part of its effort to curb reliance on imports. This strategic move aims to make China less reliant on imported oil while solidifying its position in the global energy landscape.

    In line with this target, a massive concrete facility—almost the size of Monaco—has been established along China’s southern coastline. This facility lies at the forefront of Beijing’s efforts to increase its domestic oil production capacity, reported Financial Post.

    Located near the gambling hub of Macau, this sprawling facility, operated by a subsidiary of China National Offshore Oil Corp. (CNOOC), boasts a workforce of over 15,000. It can boost the production of advanced platforms designed to be deployed in the country’s offshore oil fields.

    Beijing’s ever-growing energy demand, which is impossible to address with its existing ageing onshore wells, has made the country increasingly reliant on imported oil. Currently, the country addresses more than 70% of its energy demand with imported crude. That is a substantial jump from less than 10% at the beginning of the millennium.

    CNOOC, one of China’s leading state-owned oil companies, is playing a critical role in making the country substantially energy independent. The company is investing heavily in developing high-end drilling technologies to challenge the dominance of Western oil majors in China’s Oil and Gas (O&G) sector.

    Even though O&G giants like Chevron and Shell still lead the sector, CNOOC is committed to narrowing the gap by increasing its deepwater exploration activities both domestically and internationally.

    However, CNOOC’s endeavour to expand the county’s deepwater drilling operations, particularly in the South China Sea, didn’t come without challenges and geopolitical hurdles.

    Despite these challenges, this Chinese oil major developed offshore oil fields in the Bohai Bay and the South China Sea. These accounted for roughly 60% of the country’s oil production last year.

    “With significant untapped volumes offshore China, domestic offshore barrels are expected to become an indispensable growth engine for the coming decade,” stated Baihui Yu, senior research analyst at S&P Global Commodity Insights. “Technology progress and increased access have enabled more drilling to be focused into deeper waters.”

    China is not the first country to turn to offshore drilling. Onshore oil reserves are declining fast. That is resulting in both a deficit in supply and an increase in the cost of electricity generation. As a result, countries like the USA are also expanding their deepwater oil exploration.

    That said, deepwater drilling poses several technical challenges, including wellbore stability, subsurface uncertainties, and reservoir characterisation.

    Offshore O&G operators looking to ensure higher operational efficiency, reduced risks, and minimised environmental impact leverage a versatile seismic acquisition platform such as Silixa‘s Carina® Sensing System. High-end distributed acoustic sensing-based (DAS) seismic systems improve decision-making and enhance subsurface imaging and monitoring by providing high-resolution seismic data throughout the well’s lifespan. The result is improved reservoir characterisation and proactive wellbore stability measures, ultimately enhancing the efficiency and safety of deepwater oil drilling operations.

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