Why China Can’t Replicate America’s Shale Boom

Oilprice.com via Ya-snooze Finance ^ | 1/27/212 | Editor OilPrice.com

[jdsteel]

China has been betting big on developing its shale gas resources, driven by surging natural gas demand and efforts to boost energy security.

State oil and gas majors have been investing heavily in shale gas development in the key shale provinces and have really boosted shale gas production in recent years.

(snip)

Unlike in the U.S., the development of shale gas resources in China is much more difficult due to more complex geography and a lack of adequate infrastructure to remote mountainous regions where most of the Chinese shale resources lie. Drilling for shale gas in China requires deeper wells, while fracturing is also tricky because of the mountain terrain and geological constraints.

[jdsteel]

Joe Xiden is putting his knee on the neck of US Frackers, China is subsidizing theirs.

They have a challenge just as great as the geography and lack of infrastructure; fracking is much an art as it is a science, especially when it comes to the creation of the right mix of sand, lubricants and other ingredients of the fracking fluid. I expect them to offer US operators with experience BIG MONEY to come over and show them how it's done.

[maddog55]

Under Biden we’d have to pay for China’s pollution.. Only have 9 years!!

[MattMusson]

Fracking requires several things. Among them:
1. a shit ton of capital
2. a bunch of experienced drilling engineers
3. private ownership of land

[Zhang Fei]

I suspect the real issue, avoided in the following excerpt, is that the risk/reward ratio isn’t all it could be. If the terms were more generous, the majors would probably sink more money into this effort. Then there’s the Indian giver syndrome, where terms signed and sealed before resources were made exploitable are promptly reneged upon once successful, economic extraction is accomplished. Not unique to China, but a perennial where foreign natural resource companies are concerned.

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[However, it may have to rely only on its own oil and gas majors for sustaining the shale gas production growth as international oil majors abandoned shale exploration in China years ago.

In 2019, BP became the latest international major to quit drilling for shale gas in China because of poor exploration drilling results.

Commenting on BP’s exit, Xianhui Zhang, Wood Mackenzie Eastern Asia upstream research analyst, said at the time:

“We understand that both poor well performance and challenging above-ground conditions contributed to BP’s decision. The difficulties, for both national oil companies (NOCs) and oil Majors, highlight the unique challenges of developing shale gas in China. These include complex and deep reservoir geology, low well productivity, marginal economics and infrastructure constraints.” ]

[jdsteel]

NOT to disagree with anything you’ve said, but the most experienced and wily fracking operators are the small, independent outfits.

Not the majors.

[crusty old prospector]

Completions engineers are more valuable than the drillers. Drilling the lateral is the “easy” part. Completion costs are usually around 65% of the cost of the well.

[Basket_of_Deplorables]

What’s completion? Besides the obvious lol. What’s involved?

[T-Bird45]

Completion is the process that brings the well into production. In the case of a horizontally drilled well that has multiple fracture zones needed in order to maximize production, it requires an understanding of the geology that allows planning to fracture specific locations in the well bore and set downhole production equipment.

[Thud]

It’s called geology.

[Wuli]

Geology.

[crusty old prospector]

The fracing is the completion. The driller is not involved much once the well is drilled to total depth.