In a BMI report despatched to Rigzone by the Fitch Group just lately, analysts at BMI, a Fitch Options firm, stated China’s outlook for shale oil manufacturing is bettering on the again of accelerated exploration and a collection of recent discoveries.
“State-owned corporations are making notable progress in shale oil exploration and manufacturing, viewing shale as a key supply of future provide as typical fields mature and face steeper decline charges,” BMI analysts acknowledged within the report.
The analysts went on to notice that China “has important potential in shale and tight oil” however stated “replicating the U.S. shale growth stays unlikely”.
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“State-owned corporations cite plentiful tight oil assets within the Ordos, Junggar, Songliao, Sichuan, Qaidam, Santanghu, Jiyang, North Jiangsu, and Bohai Bay basins,” the analysts stated within the report.
“These corporations are incentivized to pursue high-risk, high-cost tasks no matter world oil costs, given nationwide priorities of vitality safety and self-sufficiency,” they added.
The analysts highlighted that the nation’s Nationwide Power Administration reported a 30 % yr on yr enhance in shale oil output in 2024, “to six.0 million tons (round 120,000 barrels per day)”.
“Though shale at the moment represents a small share of whole manufacturing, regular progress is predicted,” the BMI analysts acknowledged within the report.
“Most tasks stay pilots with small capacities relative to traditional developments, and manufacturing progress shall be constrained by difficult geological circumstances,” they added.
“In contrast to the U.S., exploiting China’s shale oil and fuel assets is tougher as a result of complicated and deep reservoir geology, decrease reserves scattered throughout valleys, decrease effectively productiveness, and better prices of manufacturing,” they continued.
“At the moment tasks produce small volumes between 10,000 barrels per day and 50,000 barrels per day, far decrease than typical fields like Daqing. Though China has made some progress in producing shale oil, the tempo of manufacturing progress would stay gradual, far lower than sufficient to offset depletion in producing fields,” they stated.
The analysts went on to notice that “progress by way of shale oil manufacturing might complement China’s crude oil manufacturing” however stated “it’s unlikely to lift home output to a brand new degree”.
“Reaching increased shale oil manufacturing will depend upon the commercially viable large-scale manufacturing from new discoveries,” the analysts stated.
Within the report, the BMI analysts projected that PetroChina and Sinopec will proceed to guide unconventional oil and fuel exploration and manufacturing, “with rising funding burdens reflecting restricted international participation”.
“Worldwide corporations have proven little curiosity in shale oil in China, and corporations resembling Shell and ExxonMobil have scaled again their involvement,” they added.
“Sinopec elevated capital expenditure for shale and ultra-deep oil and fuel exploration by 30 % in 2025, lifting spending to CNY8.4 billion [$1.18 billion] within the first three quarters from CNY6.4 billion [905 million] in 2024,” they continued.
“Sinopec’s shale works are concentrated within the Jiyang, North Jiangsu, and Bohai Bay basins, the place the corporate reviews breakthroughs in ultra-deep shale oil exploration. The Shengli Jiyang undertaking stays Sinopec’s largest shale asset,” they stated.
“In September 2025, Sinopec introduced the Xinxing and Qintong discoveries in jap China, with mixed confirmed reserves of 180 million tons. Nonetheless, we don’t anticipate to see output from these reserves earlier than 2030,” the analysts went on to state.
The BMI analysts additionally famous that shale oil exploration and manufacturing are central to PetroChina’s long-term technique.
“Key tasks embody Qingcheng on the Changqing oilfield within the Ordos Basin, Jimsar on the Xinjiang oilfield and Gulong on the Daqing oilfield,” they highlighted.
“PetroChina produced 5.1 million tons of shale oil in 2024, accounting for about 85 % of China’s whole. Media reviews point out that the Changqing oilfield, China’s largest shale base within the Ordos Basin, surpassed 20 million tons in cumulative manufacturing by November 2025,” they added.
“The Gulong undertaking in Qingcheng is awaiting full-scale improvement and will materially offset declines at mature fields. Output from Xinjiang and Changqing ought to rise with capability expansions, however the impact on nationwide manufacturing shall be restricted,” they warned.
“We anticipate incremental features from these tasks, which have but to peak, to be largely offset by declines at growing older fields, notably Daqing,” they famous.
Rigzone has contacted the State Council the Individuals’s Republic of China and the State Council Info Workplace, the Worldwide Press Heart of China’s Ministry of International Affairs, PetroChina, Sinopec, ExxonMobil, and Shell for touch upon the BMI report. On the time of writing, not one of the above have responded to Rigzone.
To contact the creator, e mail andreas.exarheas@rigzone.com
