China agency sees lower oil recovery at Nanpu field

PetroChina's (0857.HK: Quote, Profile , Research)(PTR.N: Quote, Profile , Research) Jidong Nanpu find has economically recoverable oil reserves of only about 86.6 million tonnes (632 million barrels), according to the Chinese government agency that certifies reserves.

The field, hailed as China's biggest discovery in decades when it was announced earlier this year, contains total "proven" oil reserves of 445 million tonnes, or some 3.2 billion barrels, the China Land and Resources News, a newspaper run by the Ministry of Land and Resources, reported on Tuesday.

The figure was nearly 10 percent higher than an earlier estimate of 405.07 million tonnes of oil made by the China National Petroleum Corp. (CNPC), PetroChina's parent.
But the report said that only 86.6 million tonnes of that was economically recoverable, although it did not say what oil price it had used to calculate the economics of the field.

It said technologically recoverable reserves were at 94.91 million tonnes, but did not explain what the figure meant.

An evaluation group organised by the ministry's oil and gas reserves certification office also agreed that the field contains 53.6 billion cubic metres of proven natural gas in place, the newspaper added, less than 40 percent of the company's own estimate.

A CNPC spokesman declined to comment on the report.

Chinese government and industry estimates of oil and gas reserves often differ significantly from those in the West, which are governed by strict definitions that make clear how much of a field's oil is expected to be produced over its lifetime.

The new Nanpu figures would mean a recovery rate of some 21 percent by the government's technical standards and only 19 percent by economic standards, both sharply lower than a 40 percent target that the company gave several months ago.

CNPC said in May that Jidong Nanpu contains a total of some 1.02 billion tonnes (7.3 billion barrels) of oil and gas, which also include probable and possible reserves, ranking it among the world's biggest finds this decade.