Undiscovered Shale Oil and Gas in China's Songliao Basin: the 2017 USGS Assessment

A U.S. Geological Survey assessment from 2017, published as Fact Sheet 2018–3014 in May 2018.

Using a method built on the geology of the rocks, the U.S. Geological Survey (USGS) estimates that shale reservoirs in the Upper Cretaceous Qingshankou and Nenjiang Formations of the Songliao Basin, in northeastern China, hold a mean of 3.3 billion barrels of undiscovered, technically recoverable oil and 887 billion cubic feet of gas.

Figure 1. The Songliao Basin and its two shale oil assessment units. Base map from the National Park Service. USGS.

Why look at the shale

The Songliao Basin is the most productive oil-bearing nonmarine basin in China, mostly because of the super-giant, conventional Daqing Oil Field. Discovered in 1959, Daqing produces oil from high-quality sandstone reservoirs in large anticlinal traps. The oil in those sandstones came from the lake-bed shale of the Qingshankou Formation lying beside them.

Daqing has produced over 12 billion barrels of oil, but its output has fallen in recent years. With conventional production declining, Cao and others (2017) and Liu and others (2017) studied whether the Qingshankou could yield shale oil itself. They noted that operators had carried out early exploration and tests, but no shale-oil production had been reported in the basin.

The USGS therefore assessed the potential for continuous, or unconventional, oil in the organic-rich lake shales of both formations.

The two shales

Both formations were laid down after an Early Cretaceous rifting phase, while the basin — a continental retro-arc basin — was sagging and subsiding strongly.

The Qingshankou's organic-rich member marks the greatest extent of the Upper Cretaceous lake. Liu and others (2017) identify several areas near the centre of the basin where its total organic carbon exceeds 5 weight percent.

Both formations contain Type I kerogen and lie mostly in the oil window. In the centre of the basin, vitrinite reflectance in the Qingshankou exceeds 1.1 percent, falling below 0.5 percent near the basin's edges.

One concern is the rock itself. Brittle minerals make up more than 40 percent of the Qingshankou, but its clay content averages 55 percent — much higher than in shale-oil reservoirs producing in the United States. That raises doubts about whether it would respond well to hydraulic fracturing.

Two assessment units

Within the Upper Cretaceous Total Petroleum System, the USGS defined two assessment units: the Qingshankou Formation Shale Oil unit and the Nenjiang Formation Shale Oil unit.

Burial history modelling suggests that later Cretaceous sediments buried both deeply enough for them to begin generating oil in the latest Cretaceous. The Qingshankou lies several hundred metres deeper than the Nenjiang and is more thermally mature, but neither was buried so deeply that it became overmature. Heat and burial in the basin were close to ideal for making oil.

• Qingshankou unit: the areas where the formation's vitrinite reflectance has passed 0.6 percent, following Liu and others (2017).
• Nenjiang unit: drawn to the same outline, but excluding areas where the Nenjiang is less than 100 m thick.

Continuous oil and gas accumulations in the United States served as analogues. The average drainage area of a well, the success ratio and the oil each well is expected to recover all came from American shale-oil plays.

Results

The mean total for continuous oil is 3,323 million barrels, with an F95–F5 range from 720 to 7,469 million barrels. For gas, the mean is 887 billion cubic feet, ranging from 164 to 2,170 billion cubic feet. For natural gas liquids, the mean is 22 million barrels, ranging from 3 to 57 million barrels.

F95 means a 95 percent chance of at least the amount shown, and the other columns are read the same way. The results are fully risked, and each unit was given a probability of 1.0. These figures are undiscovered, technically recoverable resources; they do not say how much could be produced at a profit.

Sources

• Potter, C.J., Schenk, C.J., Pitman, J.K., Klett, T.R., Tennyson, M.E., Gaswirth, S.B., Leathers-Miller, H.M., Finn, T.M., Brownfield, M.E., Mercier, T.J., Marra, K.R., and Woodall, C.A., Assessment of Undiscovered Continuous Oil and Gas Resources of Upper Cretaceous Shales in the Songliao Basin of China, 2017, U.S. Geological Survey Fact Sheet 2018–3014, May 2018. https://doi.org/10.3133/fs20183014 — the map, tables and closing text recovered from the PDF, which the imported page had cut off.
• The fact sheet draws on Cao and others (2017), Feng and others (2010), Lee (1986), Li (1995), Liu and others (2017), Pan and others (2010) and Wang and others (2016).
• Rewritten in hubnx's own words.