The oil price plummeted and could not stop shale gas "money scene"

In recent days, the price of domestic refined oil has been declining, and the shale gas, which is an unconventional energy source, is in a state of depletion. However, in the view of many people in the industry, the prospects for shale gas are still promising.

The State Council's latest "Strategic Action Plan for Energy Development (2014-2020)" (hereinafter referred to as the "Action Plan") clearly states that by 2020 China's shale gas production will reach 30 billion cubic meters, compared with previous plans. It dropped by half. For this latest goal, industry experts have stated that the target has been conservative, and only PetroChina and Sinopec can achieve their half-capacity target by 2020.

“The drop in crude oil prices has little effect on shale gas in China.” Yang Yonggang, director of the Department of Geology and Exploration of the Ministry of Land and Resources, said in an interview with the reporter of “Daily Economic News” that shale gas prices are linked to natural gas, but domestically Natural gas prices are still priced by the government, so they are not affected by the drop in international crude oil prices. From the perspective of China's resources and market demand, the future growth of oil and gas in China is mainly in non-conventional areas such as shale gas.

Shale gas production target halved

In recent years, major domestic energy giants such as Sinopec, PetroChina and CNOOC have been actively developing non-conventional energy sources. Since the beginning of this year, the difficulty of commercializing shale gas development has gradually emerged, which has become a problem that development companies have to face.

The research report released by GF Securities earlier this year held that shale gas extraction is generally difficult to profit due to the low domestic natural gas prices and high mining costs. In this regard, many people in the industry also believe that shale gas development is still in its infancy in China. High development costs and long drilling cycles are still the bottlenecks that plague shale gas development.

The country's capacity plan for shale gas has also quietly changed. In the Shale Gas Twelve-Five Development Plan (2011-2015) released by the National Energy Administration in 2012, the outlook for 2020 production is 60 to 100 billion cubic meters. However, the State Council’s latest "Action Plan" clearly stated that by 2020 shale gas production will strive to exceed 30 billion cubic meters. Compared to the previous plan, the output was reduced by more than half.

However, in the opinion of many experts, the target of 30 billion cubic meters is somewhat conservative. Li Yuxi, researcher of the Mineral Resources Reserve Evaluation Center of the Ministry of Land and Resources, stated at the 4th China Shale Gas Development Conference held recently that according to forecast, China's shale gas production in 2014 will reach 1.5 billion cubic meters. In 2015 shale gas In the output, PetroChina will account for 2.6 billion cubic meters and Sinopec will account for 3.5 billion cubic meters, totaling 6.2 billion cubic meters. If we consider the production of other regions, the overall basic can achieve the planning goals.

For China's 2020 shale gas capacity target, Li Yuxi predicts that with the current system unchanged, shale gas production will be 26 to 36 billion cubic meters in 2020, of which Sinopec will be between 12 and 15 billion cubic meters. China National Petroleum Corporation has 13 billion to 20 billion cubic meters of oil; other companies have shale gas production of 1 to 2 billion cubic meters.

Talking about the development prospects of shale gas in China, Li Yuxi believes that if all the favorable areas for shale gas in the Sichuan Longmaxi Formation are put into use and 3 trillion cubic meters of recoverable resources are used, the previously planned plan can be basically achieved by 2020. Shale gas production reached 60 billion to 100 billion cubic meters.

Crude Oil Price Difficult to Change Shale Gas Development Trend

When the international crude oil prices continue to fall and the domestic retail prices of refined oil products will usher in a “nine consecutive decline”, the shocks in the commodity market have gradually rewritten the upstream and downstream ecosystems of the industrial chain. Will domestic shale gas development be impacted by the industry? Hot topics.

In the past few months, crude oil prices in the international market have fallen by nearly 30%. As of November 29, Brent crude oil prices fell to 70.02 US dollars per barrel, once fell below the 70 dollar mark in intraday trading, a record low of nearly 4 years. Affected by this, the domestic retail price of refined oil products seems to have been a “nine consecutive drop”, but the Ministry of Finance and the State Administration of Taxation issued a notice that the consumption tax for gasoline and diesel will increase by 0.12 yuan and 0.14 yuan per litre since November 29th. The price per tonne of influencing gasoline and diesel increased by 225 yuan and 220 yuan respectively. Two factors offset, the domestic refined oil prices remain unchanged.

Some analysts told the Daily Economic News reporter that overall, the drop in oil prices will bring pressure on the entire petrochemical industry, of which coal, natural gas, and shale gas will be hit harder. At present, most private enterprises are more cautious, oil prices continue to fall, and the enthusiasm for finding alternative energy sources has weakened. Shale gas development costs are higher after all.

Many shale gas experts believe that the drop in crude oil prices will not hinder the development trend of shale gas. Yang Yonggang said that in the long run, the drop in international oil prices will hardly affect the price of shale gas. China will become the largest country in energy consumption growth. Fossil energy will continue to be the main body of China's energy in the next 20 years, while the proportion of coal will slowly decline, and the proportion of natural gas will continue to rise.

“In the future, China's oil and gas growth space is mainly in the non-conventional energy fields such as shale gas, and we should have firm confidence in this.” Yang Yonggang said that as long as there is a resource basis and there is market demand, other problems can be solved through hard work.