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The peak oil production forecast of China：
Result after distinguishing conventional and
unconventional oil
By
Ke Wang, PhD Student
School of Business Administration, China University of Petroleum, Beijing, China
No. 18, Fuxue Road, Changping District, Beijing, China
Phone: 86-15101181737/ Email: [email protected]
Abstract：Researchers in China have tended not to distinguish between conventional and unconventional
oil, leading to inaccuracies in their estimates of future oil production. The purpose of this paper is to make
an accurate estimate of the pattern of China’s future oil production, by properly distinguishing between
these oil types. We make our analysis by treating conventional oil as a single category, and by dividing
unconventional oil into four categories: viscous oil, light tight oil, kerogen oil, and oil sands. For each of
these categories, we determine appropriate historical production amounts as well as estimates of ultimate
recoverable resources (URR). We then estimate future production by year, using the Multi-Cycle
Generalized Weng Model for categories where past production history is available, and Ward et al.’s
Stochastic Resource-Constrained Growth Model for the oil sands, where no history is available. Our
analysis indicates that China’s conventional oil production peaked in the year 2010. Adding China’s
unconventional oil would delay the overall peak until 2029, or 19 years after the peak of conventional oil
production. Compared to conventional oil, unconventional oil is higher in cost and more likely to lead to
environmental problems. Furthermore, low oil prices add uncertainty regarding future production of
unconventional oil.
1. Introduction
China is the world’s largest oil consumer and the world’s fourth largest oil producer [1]. Because of
China’s important role, an accurate forecast of China’s oil production is important both for estimating future
world oil production, and for China’s own use in developing its energy policy. At this point, however,
forecasts of China’s future oil production diverge widely, with no clear consensus as to the future pattern to
be expected. There are many reasons for this divergence, including different data sources, different choices
of ultimate recoverable resources (URR), and different forecasting models of future production. The single
most important reason for divergence is failure to recognize the very different patterns to be expected for
production of conventional and unconventional oil.
Unconventional oil tends to be much more difficult to extract than conventional oil. There are different
ways of defining unconventional oil. According to the United States Geological Survey (USGS) [2],
conventional oil is oil that is extracted using conventional methods (flowing oil production method, artificial
lift method, water flooding method, gas drive method, etc.), while oil requiring more advanced techniques
is considered unconventional oil. The German Federal Institute of Geology and Natural Resources (BGR)
distinguishes conventional and unconventional oil based on density [3]: oil with a density of less than 1.0
g/cm3 (or its API°(American Petroleum Institute gravity) more than 10) belongs to conventional oil, while
others belong to unconventional oil. Other agencies and scholars distinguish conventional and
unconventional oil from the perspective of economic feasibility or characteristics of geology [4,5]. In
summary, unconventional oil has characteristics that require it to be extracted with specialized techniques
that require advanced technology, and typically have higher costs compared to the extraction of
conventional oil [6].
When oil is extracted, conventional oil tends to be extracted first because it cheapest and easiest to
extract. As a result, the oil resources that remain contain a disproportionate share of unconventional oil.
Historically, scholars in China haven’t distinguished conventional and unconventional oil, so “China’s
conventional oil resources” published by China’s Ministry of Land and Resources (MLR) include some
unconventional oil [6]. Furthermore, China’s oil production data published by National Bureau of Statistics
of China (NBSC) actually contains a growing part of unconventional oil production [7].
The fact that what is recorded as conventional oil contains some unconventional, and the fact its
production patterns are likely to be different from those of conventional oil leads to over-estimates of
China’s conventional oil production. Li [8] forecast that China’s oil production would peak in 2020-2030,
with peak production of 216-219 million tons; Tao [9] estimated that China’s oil production would peak in
2019 and the peak production would be 199.5 million tons; Jing [10] estimated that China’s oil production
would peak near the year 2020, with peak production of 220 million tons; Feng [11] forecast that China’s
oil production might peak in 2026, with peak production of 200 million tons. In summary, scholars’
estimates for China’s oil production peak year are in the range of 2019-2030, with peak production of
around 200 million tons. All of the aforementioned researchers have a common feature: they haven’t
distinguished between conventional and unconventional oil. As a result, their estimated results for China’s
peak in oil production are confusing. Only Wang [7] has distinguished between conventional and
unconventional oil before making his oil production forecast. However, the URR data of China’s
conventional oil Wang used in his forecast of China’s conventional oil are that published by China’s official
agencies (MLR), without adjustment for classification errors; the historical production data of China’s
conventional oil he used is still mixed with some unconventional oil. Furthermore, since the aim of Wang’s
paper is to estimate the largest long-term oil supply of China, the URR of unconventional oil he selects
contains a significant portion of undiscovered resources.
The aim of this paper is to objectively forecast China’s conventional oil production and unconventional
oil production based on accurate historical production data, reasonable URR data, and suitable production
forecasting methodology.
2. Resource and Production
2.1 Ultimate Recoverable Resources (URR) of China’s oil
Ultimate Recoverable Resources (URR) is an estimate of the total resources that will ever be produced.
This amount tends to change over time, depending on technology available and economic conditions
[12,13].The selection of URR is very important to the peak production forecast, since its selection affects
the amount distributed to year by modeling techniques. Unfortunately, URR indications provided by
different agencies and scholars diverge widely. To get an accurate forecast of China’s peak in oil supply, we
start by making as accurate a selection of URR as possible separately for conventional and unconventional
oil, based on prior studies.
2.1.1 URR of China’s conventional oil
For many years, China’s official agency has been publishing optimistic URR estimates for China’s
conventional oil. According to the “New round of oil and gas resources assessment report”, published by
China’s Ministry of Land and Resources in 2006, China’s conventional oil URR is 21.2 billion tons [14];
the number was raised to 23.3 billion tons in the “Dynamic evaluation of oil and gas resources in China”
published in 2010 [15]; and was again raised to 26.8 billion tons in the “Dynamic evaluation of oil and gas
resources in China” published in 2015 [16].
There are several reasons for the optimistic estimates. One important reason is the confusion between
conventional and unconventional oil: the officially published conventional oil URR, if calculated in
accordance with international standards, includes some unconventional oil. Zhao pointed out that the
officially published URR of China’s conventional oil actually contains URR for some low permeability oil
and some heavy oil [6]. There are other reasons as well for the overestimation: the official agency only
considers technology limitations, but ignores economic limitations; the official agency is overoptimistic in
estimating future technology advancements; and reports sent to the agency by oil-fields are overoptimistic,
in an attempt to meet production targets [17]. For these reasons, it is reasonable to expect that China’s true
conventional oil URR will be smaller than the official published data.
URR estimates from academia, although mostly didn’t distinguish conventional oil and unconventional
oil and could be the total oil URR value, are averagely only about half as much as from the official agency.
From Figure 1, we can see that these average 12.23 billion tons (only estimates after year 2000 are
considered for the sake of time effectiveness).
Figure 1. Summary of research results regarding China’s total oil URR (conventional + unconventional)
Note: Numbers beside the blue points reflect references to published reports [18-35]
In academia, only Mohr [36] has given the results of China’s conventional oil and unconventional oil
separately. According to Mohr, China’s conventional oil URR is 12.80 billion tons under “Low Scenario”
and 14.37 billion tons under “Best Guess Scenario”.
In this paper, we choose to use Mohr’s estimates under “Low Scenario” instead of that under “Best
Guess Scenario” as URR of China’s conventional oil, because even the average estimate for China’s total
oil URR (conventional + unconventional) in academia is less than Mohr’s “Low Scenario” estimate for
China’s conventional oil URR.
[18]
[19]
[20][21]
[22]
[23][24]
[25]
[26]
[27][28]
[29]
[30]
[31]
[32]
[33]
[34]
[35]
6
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12
14
16
18
1990 1995 2000 2005 2010 2015
Un
it：
Gt
Publication Year
Average number of China's total oil URR estimated by academie after year 2000
2.1.2 URR of unconventional oil
According to the “World Energy Outlook 2012” report from International Energy Agency [37],
unconventional oil resources include oil sands, extra-heavy oil, oil shale and light tight oil. Some scholars
also include heavy oil in the range of unconventional oil.[38] China has traditionally used viscosity, rather
than density, to distinguish among types of oil. Much of what is called “viscous oil” in China would be
categorized as heavy oil or extra-heavy oil if international terminology were used [39]. In this paper, we
treat all of China’s viscous oil as unconventional for several reasons. Firstly, the single term “viscous oil”
is used, there is no way to distinguish between heavy and extra-heavy oil in China’s historical data, though
China National Petroleum Corporation (CNPC) just set about distinguishing since year 2013. Secondly,
there are some scholars who characterize combinations of heavy oil and extra heavy oil as unconventional
oil [39]. Thirdly, in fact, some scholars in China already categorize China’s viscous oil as unconventional
oil [40]. Thus, we divide China’s unconventional oil into four types: viscous oil, oil sands, kerogen oil (oil
shale) and light tight oil.
For the URR of China’s viscous oil, the author has surveyed the results of many international and
domestic researches. Due to the large difference of data [3,6,41,42], accompanied by the rough calculation,
the data accuracy is suspicious. On the other hand, it has been a long time since China began to develop
viscous oil, so the data availability is quite good. In order to raise the data accuracy, this paper uses the
bottom-up analysis method to select URR data of each viscous oil field in China and then adds them up to
get the total URR of China’s viscous oil: 2.92 billion tons (as is shown in table 1). Due to some limitation
matters, the data we have found are all technologically recoverable resource (TRR). So this paper just use
it to substitute ultimate recoverable resource (URR) of viscous oil in China. We note that TRR resources
are likely to be significantly higher than those which are both economically and TRR, unless oil prices can
rise to very high levels.
Table 1. URR of major China viscous oil fields
Liaohe
oil field
Xinjiang
oil field
Dagang
oil field
Shengli oil
field
Henan oil
field
Bohai
oil field
Total
URR(billion tons) 0.65 0.78 0.226 0.441 0.033 0.79 2.92
Data Source [43] [44] [45] [46] [47] [48]
Light tight oil has just been included into the unconventional oil category in 2012 [37]. And in China,
the concept of light tight oil has just been widely accepted and used [49]. Compared with light tight oil,
China’s academia has researched more, longer time on the low permeability oil. Li [50]and Zhao [51] has
divided low permeability oil into several types by different permeability, and has identified extra-low
permeability oil as oil extracted from reservoir with the average matrix permeability range of 0.1-1 mD.
According to the Word Energy Outlook 2012 published by IEA, light tight oil is oil produced from shale,
or other very low permeability rocks, with technologies similar to those used to produce shale gas [37]. But
IEA didn’t clearly identify the permeability range of light tight oil. Both Zou [52,53]and Jia [49] identified
the matrix permeability range of tight oil as equal to or less than 0.1 mD; the industrial standard “tight oil
geological evaluation method” published by China’s National Energy Administration identified the matrix
permeability range as less than 0.2 (or the ail permeability less than 2) [54]. What’s more, from the practical
perspective, the matrix permeability of typical tight oil producing area, Bakken, in America is 0.01-0.1mD
(or the Air permeability in the range of 0.1-1mD) [55,56]. So the extra-low permeability oil produced in
China should be included in the range of tight oil.
According to the researches by Chinese scholars, the technically recoverable resources (TRR) of
China’s light tight oil (including tight oil and shale oil) is in the range of 4.3-10 billion tons, with the average
value of 7.15 billion tons[41,52,57,58]. However, according to BGR, the technically recoverable resources
(TRR) of China’s light tight oil is only 0.427 billion tons [59]; according to McGlade, the technically
recoverable resources (TRR) of China’s light tight oil is in the range of 0.273-8.458, with the average value
of 3.82 [60]; according to EIA/ARI [61]and IEA,WEO2013 [62], the value is 4.393 billion tons. Therefore,
this paper uses the average value of the technically recoverable resources (TRR), 3.948 billion tons, as the
ultimate recoverable resources (URR) of China’s light tight oil. Again, this is assuming that oil prices can
rise to a very high level, since the amounts are TRR, not economically and technically recoverable resources.
For the URR of China’s kerogen oil, the first authoritative estimation comes from China’s Ministry of
Land and Resources. According to its “New round of oil and gas resources assessment report——
Evaluation report of domestic oil shale resource” published in 2006, the technically recoverable resources
(TRR) of China’s kerogen oil is 11.98 billion tons [63]. Afterwards, many scholars estimation of China’s
kerogen oil resource are based on this data [6,4141,57,64]. Nevertheless, this data is overestimated.
According to BGR [59], the recoverable resources of China’s kerogen oil is only 0.639 billion tons. Data
published by WEC [65], 1.344 billion tons is also much smaller than the data published by China’s official
agency. This paper uses the average number of data from BGR and WEC, 0.992, as the URR of China’s
kerogen oil.
China’s oil sands URR data used by Chinese scholars are also mainly based on the “New round of oil
and gas resources assessment report” published by China’s Ministry of Land and Resources in 2006.
According to this report, the technically recoverable resources of China’s oil sands resource is 2.26 billion
tons[66]. However, just as Chengzao Jiai has pointed, China’s oil sands resource has poor quality, low
continuity and certain difficulty to extract [67]. Besides, according to the report of BGR [3], the technically
recoverable resources of China’s oil sands is only 25 million tons, and the URR of China’s oils sands is
estimated as just 4 million tons by Mohr and Evans [68]. Therefore, this paper choose the average number
of the official published TRR, BGR published TRR and Mohr published URR, 762 million tons as the URR
of China’s oil sands.
Above all, after comparison, analysis and selection, the URR of China’s each type of unconventional
oil used by this paper is shown in table 2.
Table 2. URR used in this paper of China’s unconventional oil
Viscous oil Light tight oil Kerogen oil Oil sands
URR(billion tons) 2.920 3.948 0.992 0.762
2.2 Historical production of China’s oil
2.2.1 Historical production of China’s unconventional oil
So far, among China’s unconventional oil, oil sands has almost not been extracted, so there is no
historical production data for it.
To get the historical production data of China’s light tight oil, the author firstly interviewed related
personii in charge in CNPC, and learnt that China’s light tight oil (excluding extra-low permeability oil [69])
was just in the pilot stage of development and there were production data of only recent two years. As is
discussed in part 2.1.2, the extra-low permeability oil should also been included into light tight oil.
i Former General Geologists of CNPC.
ii Director Kong, Department of Exploration and Development, CNPC (Interview time: 2015/05/16)
According to the media of CNPC, China’s of extra-low permeability oil production mainly comes from
Changqing oil field; the large scale production begins from the year 2008 and has already increased to over
8 million tons in 2013 [70].
Figure 2. Historical production of China’s light tight oil separated between extra low permeability oil and
other
China’s Kerogen oil has been developed since 1930, but the scale of production is very small (see
Figure 2), highest production record is just 0.755 million tons (2011). Besides, the historical production of
China’s Kerogen oil presents the multi-cycle feature: the production kept growing from 1930 and reached
the first peak point in 1959, with peak production of 0.7278 million tons; then, with the discovery of Daqing
oil field, China’s Kerogen oil began to fall; till 1994, with the growing demand-supply difference, Kerogen
oil production stepped into growing period again [38].
Figure3. Historical production of China’s kerogen oil
Compared with the above three kinds of unconventional oil, viscous oil has been largest developed
and its historical production is always dominating the total unconventional oil production of China. China’s
viscous oil mainly locates in six oil fields: Liaohe oil field, Xinjiang oil field, Dagang oil field, Shengli oil
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field, Henan oil field and Bohai oil field [71]. They respectively belong to China’s three largest oil
companies: CNPC, Sinopec and CNOOC. From annual statistical reports of each oil companies and
yearbooks of each separate oil fields, historical viscous oil production of each oil fields were found and
collected. According to Figure 3, in the first half of production history, China’s viscous oil was supported
mainly by Liaohe oil field; however, after 2000, the viscous oil production of Liaohe oil field started to fall
gradually, while production of other five major viscous oil field (especially the Bohai oil field) kept growing.
Figure 4. Historical production of China’s viscous oil
2.2.2 Historical production of China’s conventional oil
Since China has, for a long time, not distinguished the conventional oil and unconventional oil, the oil
production data published by China's National Bureau of Statistics 2014 (same with data in “BP Statistical
Review of World Energy 2014”) is total oil production of China which includes not only conventional oil,
but also viscous oil, light tight oil and kerogen oil being mentioned in part 2.2.1. These part of
unconventional oil production should be separated out when we analyze historical production of China’s
conventional oil.
After the separation, this paper get objective data of China’s conventional oil production. According
to Figure 4, China’s conventional oil production began to show difference with the total oil production from
1984. Afterwards, the difference broadens gradually and has reached 43.401 million tons in 2013. It is also
found that during time period 1984-2013, the average annual growth rate of China’s conventional oil
production is only 1.29%, compared with that of China’s total oil production, 2.08%.
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Liaohe oil field Xinjiang Oil fieldDagang oil field Shengli Oil fieldHenan Oil field Bohai Oil field
Figure5. Historical production of China’s total oil and conventional oil
3. Method
3.1 Multi-cycle Generalized Weng Model
There are a lot of production forecasting method, the methods usually used in earlier researches about
China’s oil production forecast include Generalized Weng Model [72,73], Hubbert Model [74,75], HCZ
Model [76], System Dynamics Model [77], etc.
These method however have a common shortage: ignore the possibility that production of an area
might present several peaks. In order to consider the multiple peak situation, Feng et al. come up with the
multi-cycle Generalized Weng Model [78], which has later been proved by Wang et al. as suitable method
to simulate production of China's fossil fuels [79] and has been used to forecast China's conventional gas
production [80]. Therefore, this paper will choose the multi-cycle Generalized Weng Model to forecast the
production of China’s conventional oil and three kinds of unconventional oil (viscous oil, light tight oil and
kerogen oil) separately. The comprehensive and detailed description of the Multi-cycle Generalized Weng
Model can be found in Feng et al. [78] or Wang et al. [79]. And it is briefly introduced in Appendix A.
3.2 Stochastic Resource-Constrained Growth Model
Precondition of the application of above described Generalized Weng Model and other similar curve
simulation model is the abundant production data. Nevertheless, for some unconventional oil and gas
resources, e.g. China’s oil sands, it has almost not been extracted yet. What was worse, since China’s oil
sands resource has poor quality, low continuity and certain difficulty to extract [67], large uncertainties still
exist in its future development. So the Generalized Weng Model and other similar curve simulation models
maybe no longer suitable for China’s oil sands production forecast, new models is needed. This paper
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Viscous oil production
Light tight oil production
Kerogen oil production
Total oil production
Conventional oil production
choose to use the method held by Ward et al. [81], which will be called the “Stochastic Resource-
Constrained Growth Model” in this paper. Detailed and comprehensive description of the “Stochastic
Resource-Constrained Growth Model” can be found in Ward et al. [81]. And it is briefly introduced in
Appendix B.
4. Results
4.1 Production forecast of China’s conventional oil
To forecast the production of China’s conventional oil, this paper uses the “Multi-cycle Generalized
Weng Model” that has been introduced in part 3. According to the calculation, China’s conventional oil
production has already peaked in 2010, with the peak production of 167.5million tons.
Figure 6. Forecast of China’s conventional oil production
4.2 Production forecast of China’s unconventional oil
Among the four types of unconventional oil in China, this paper uses the multi-cycle Generalized Weng
Model to predict the production of viscous oil, light tight oil and kerogen oil while uses the “Stochastic
Resource-Constrained Growth Model” to forecast the production of oil sands.
Viscous oil is the kind of China’s unconventional oil that has longest develop history, has the largest
proportion in China’s historical production of unconventional oil and will keep on being the main
contributor to China’s unconventional oil production in the mid-short future. So in order to insure the
accuracy of its production prediction, this paper uses the bottom-up analysis method to forecast the viscous
oil production of China’s six major viscous oil field respectively, and then added them up as the final viscous
oil production result. According to the forecasting result, the production of China’s viscous oil will peak in
the year 2028, with peak production of 51.53 million tons. The growth of viscous oil production will in
mid-long term be supported by Bohai oil field, Liaohe oil field and Shengli oil field, while in long term
supported by Xinjiang oil field.
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Historical conventional oil production Simulated conventional oil production
Figure 7. Production Forecast of China’s viscous oil
Based on the Generalized Weng Model, this paper forecasted the production of China’s light tight oil
and kerogen oil. According to the forecasting result, the Production of China’s light tight oil will keep
growing and reach peak production (62.62 million tons) in the year 2043; production of kerogen oil will
keep growing in mid-long term and reach peak production of 19.08 million tons in 2059.
When forecasting production of China’s oil sands with the “Stochastic Resource-Constrained Growth
Model”, assumptions of its initial production year, initial production and its future production growth rate
are needed. According to the result of expert interviews, this paper assumes the initial production year to be
2015, the initial annual production to be 100 thousand tons; supposed the growth rate range of 3%-10%.
The simulation result shows that the oil sands production will grow gradually and reach peak production of
12.03million tons in 2090, without large implication to China’s total oil supply.
Figure 8. Forecast of China’s total oil production
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Historical production Forecasted production
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Corrected production of conventional oil
viscous oil production
light tight oil production
kerogen oil production
oil sands production
If adding up China’s conventional oil production (using corrected historical production and URR) and
the unconventional oil production forecasted in this paper, we can get the forecast for China’s total oil supply.
According to the result, the total production of China’s conventional oil and unconventional oil will peak
in 2029 (with peak production of 253 million tons), 19 years later than the conventional oil peak year.
5. Discussion
5.1 The peak year of China’s conventional oil may be even earlier than
2010
According to the forecast result of this paper, the production China’s conventional oil has already
peaked in the year 2010. But in reality, the peak year maybe even earlier than 2010 if we consider some
other kinds of disputed oil production.
The part of Daqing oil extracted by unconventional method should be categorized as unconventional
oil. In order to keep the production above 40 million tons, Daqing oil field are rapidly spread and broaden
the use of Enhanced Oil Recovery (EOR) method in recent years [17]. Since gas drive and water flooding
methods become no longer efficient enough, Daqing oil field has largely used the polymer flooding method
and even the ASP flooding method, which are featured for their high cost, large environmental impact and
rapid production decreasing rate. When classified by oil quality and geology condition, the Daqing oil
produced by polymer flooding and ASP flooding is conventional oil, but when classified by development
method, development cost and environmental impact, it may be categorized as unconventional oil.
According to Figure 9, the proportion of in Daqing oil produced by polymer flooding and ASP flooding is
becoming larger and larger since 1996 and already accounted for near 35% till the year 2013. The
classification of oil produced by polymer flooding and ASP flooding is controversial.
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oil produced by other methods
oil roduced by ASP flooding
oil produced by polymer flooding
% of oil produced by polymer flooding and ASP flooding
Figure 9. Oil production of Daqing oil field
Apart from the Daqing oil produced by polymer flooding and ASP flooding, another controversial part
of oil is the low-permeability oil and very-low permeability oil mainly produced in Changing and some
other oil fields. This paper has just categorized the extra-low permeability oil as unconventional oil.
Nevertheless, since the domestic standards for distinguishing low permeability oil, very-low permeability
oil and extra-low permeability oil are not unified and the reservoir character, accumulation mechanism,
development methods of them are all significantly different from conventional oil [6], certain large part of
low permeability oil, very-low permeability oil should be categorized as unconventional oil.
If we take all these oil production out, China’s conventional oil production may already be peaked
even earlier than 2010.
5.2 The prospect of China’s unconventional oil development may be
even more pessimistic
One thing we should mention is that the production forecast of China’s unconventional oil in this paper
just ignores the element of oil price. When the implication of low oil price is considered, there will be even
uncertain future for China’s unconventional oil.
In addition, though there is large quantify of unconventional oil resource, the high cost and serious
environmental impact will be huge constraints for its development. As is shown in Figure 11, the
development of oil sands, viscous oi, kerogen oil, shale oil will all cause much larger amount of greenhouse
gases. Meanwhile, the development cost of unconventional oil is much larger than conventional oil and
continuous high oil price is needed to support the unconventional oil development. Therefore, there are still
many uncertainties with the substitution from conventional oil to unconventional oil.
Figure 11. Upstream GHG emission and development cost of different kinds of oil. Note: The size of
bubbles in the figure represents URR of certain kinds of oil in China; Data source: URR data can be found
in 2.1 of this paper. Development cost data comes from IEA [82]. Upstream GHG emission data comes
from Brandt and Farrel [83].
0
10
20
30
40
50
60
70
80
90
100
0 5 10 15 20 25 30 35 40 45
Dev
elo
pm
ent
cost
($
/bo
e )
Upstream GHG emission (gCeq/MJ)
Conventional oil
Viscous oil & Oil sands
Light tight oil
Kerogen oil
5.3 It’s urgent to change over-optimistic attitude to China’s future oil
production
China’s conventional oil has already peaked, furthermore, its unconventional oil have uncertain future.
However, the mainstream attitude to China’s future oil production is always quite optimistic.
Looking back to the history, several scandals has already been caused by the public denial of peak oil
and over-optimistic estimate to China’s future oil production. The most typical one is the scandal of the 1
billion tons reserve of the Nanpu oil field which belongs to the Jidong oil field of CNPC. In the May of
2007,Jidong oil field published the news through Xinhua News Agency(China’s core media) saying that
they had found a new oil field named Nanpu, which has the oil reserve scale of 1 billion tons; that the oil
production of Nanpu oil field will grow to 10 million tons in the year 2012 [84]; and that Nanpu oil field
will then become one of the word largest oil field. China’s high level media “People’s Daily” has also
actively reported and advertised the great discovery [85]. According to CNPC, this great discovery stems
from the break-through of geology theory and exploration technics; it will largely improve China’s security
capacity of oil supply and become a milestone in the history of China’s petroleum industry. Some people
even regarded it as the start of another golden age of China’s oil reserve discovery. But in fact, the reserve
of Nanpu oil field has been seriously overestimated. According to the real data, the oil production of the
whole Jidong oil field (including Nanpu oil field and another affiliated oil field) in 2013 is just 1.7 million
tons and the recoverable reserve has also been corrected to 85.7 million tons.
Dating back to the 1980s, there is another scandal about “ten Daqing oil field”. With the discovery of
Renqiu oil field, China’s oil production has firstly broke through 100 million tons. Government is
enthusiastic about China’s oil industry and soon set the target of reaching oil production of 400 million tons
in 2000 and find ten Daqing-scale oil field in 20 years. China’s core media were all reporting it actively and
posts and songs were also created in order to broaden this target slogan. However, the reality has proved
that in the target year 2000, the production of China’s conventional oil is only 146 million tons and the total
production of conventional and unconventional oil is only 163 million tons. The grand “ten Daqing oil field”
target has been ruthlessly burden by the dust of history.
The attitude of objective and calm is important in the oil resource and production forecast and we
should change over-optimistic attitude as soon as possible, bravely face the reality, and deal with the peak
oil problem actively.
6. Conclusion
1) China’s conventional oil has already peaked in the year 2010 and the peak production is 167.5 million
tons. Important reason for which people haven’t realized the coming of China’s peak oil is the confusion
of conventional and unconventional oil. For this paper, the separation of unconventional oil production
from conventional oil production is still not thorough. There are still some part of controversial oil
production being included in the corrected conventional oil production, such as Daqing’s partial oil
production extracted by unconventional method, the low permeability and very-low permeability oil
production in Changqing oil fields, etc. If these production are also separated, China’s conventional oil
production might have peaked even earlier than 2010.
2) China’s viscous oil production will peak in 2028, with peak production of 51.53 million tons; light tight
oil production will peak in the year 2043 with peak production of 62.62 million tons; kerogen oil
production will peak in 2059 with peak production of 19.08; oil sands production will peak in 2090, with
peak production of 12.03 million tons. In the mid-long term future, viscous oil and light tight oil will
play important roles in China’s unconventional oil supply, while the contribution of kerogen oil and oil
sands will be comparatively small.
3) China’s total oil production of conventional and unconventional oil will peak in the year 2029 (with peak
production of 253 million tons). It is to say that China’s unconventional oil only postponed China’s peak
year of oil production by 19 years. In addition, due to the double constrains of environment problem and
cost problem, China’s unconventional oil development will still meet many challenges. What was worse,
the forecast of China’s unconventional oil production in this paper is based on the consumption that oil
price will keep enough high to support the unconventional oil development. If the low oil price
background is considered, the future of China’s unconventional oil development may have even more
uncertainties.
4) The public denial of peak oil and over-optimistic estimate to the prospect of China’s oil production has
already caused many scandals in history, such as “billion ton reserve of Nanpu oil field” and “find ten
Daqing oil field”. It is high time for China’s government to change over-optimistic attitude; to clearly
distinguish conventional oil and unconventional oil as soon as possible to be consistent with the
international standard; to bravely face the reality that conventional oil production has already peaked
and deal with the problem actively; to make separate and more suitable policies and strategies to develop
unconventional oil.
Acknowledgments
This study has been supported by the Science Foundation of China University of Petroleum, Beijing (No.
2462014YJRC024), Humanities and Social Sciences Fund of China’s Ministry of Education (Grant No.
15YJC630121), National Natural Science Foundation of China (Grant No. 71373285; Grant No. 71303258;
Grant No. 71503264) and the Major Program of the National Social Science Found of China (Grant No.
13&ZD159).
Appendix A. Introduction to the Multi-cycle Generalized
Weng Model
The Single-cycle Generalized Weng Model can be represented by the equations below:
Q = a𝑡𝑏𝑒−𝑡
𝑐 (1)
𝑁𝑅 = 𝑎𝑐𝑏+1𝛤(𝑏 + 1) (2)
𝑄𝑚𝑎𝑥 = 𝑎( 𝑏𝑐
2.718)𝑏 (3)
𝑡𝑚 = 𝑏𝑐 (4)
In these equations, Q stands for the annual production; Qmax stands for the peak production; NR stands
for the ultimate recoverable resource; t stands for the time of development; tm stands for the peak year; a, b,
c are all constants in the forecast model; 𝛤(𝑏 + 1) stands for the Gamma Function, where 𝛤(𝑏 + 1)=b！
if b is a positive integer.
To handle the multi-peak situation, Feng et al. developed a modification of the Generalized Weng
Model that added together the production of several forecasting cycles. The basic equation for this model
is the following:
Q = ∑ 𝑄𝑖𝑘𝑖=1 =∑ [𝑄𝑚𝑎𝑥 (
𝑒𝑡
𝑡𝑚)
𝑏𝑒
−(𝑏𝑡
𝑡𝑚)]
𝑖
𝑘𝑖=1 (5)
Appendix B. Introduction to the “Stochastic Resource-
Constrained Growth Model”
Ward et al. developed an idea in 2012 for forecasting production of a resource such as unconventional
oil or gas when little history is available. This approach involved simulating future production with a family
of growth curves starting from a given value of initial production. The group of growth curves is
distinguished by different production growth rates. In the simulation, growth rates are assigned randomly
within a selected value range, to approximate future production uncertainties.
In this approach, production q(t) is allowed to grow exponentially according to the specified initial
growth rate r, but is progressively curtailed as the overall quantity of the extracted resource approaches the
recoverable resource quantity URR remaining at time t=0. The model is given by:
𝑞(𝑡) = 𝑞0𝑒𝑘𝑟𝑡(1 −𝑄(𝑡)
𝑈𝑅𝑅) (6)
In this model, Q(t) is the cumulative production at time t (and Q=0 when t=0), q(t) is the production
rate at t=0, and k is an exponent scaling factor. k is used to force the model to yield exponential growth
conforming to the specified growth rate r for at least the duration of the first time step (t1), and is
determined by:
k≈ln [(1+𝑟)𝑡1/(1−(
𝑞0(1+(1+𝑟)𝑡1)𝑡12𝑈𝑅𝑅
))]
𝑟𝑡1 (7)
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