The Shengli Jiyang National Demonstration Zone for Shale Oil is China’s first… Continental Rift Basin The national demonstration zone for shale oil is primarily located within Shandong Province, covering an area of 7,300 square kilometers, and achieved a breakthrough in exploration in 2021. Unlike conventional oil, shale oil is trapped in the pores of tight rocks, where it cannot flow naturally; it is typically buried at greater depths and occurs in scattered, discontinuous reservoirs, making it a globally recognized, world‑class challenge in the field of oil and gas exploration and development.

Compared with North American marine‑type shale oil, the Shengli Jiyang shale oil exhibits more distinctive geological conditions and poses greater challenges for exploration and development. According to Zhang Shiming, Deputy Chief Geologist at the Shengli Oilfield, the maturity level of shale oil reflects the source‑rock’s hydrocarbon‑generating capacity; internationally, only shale oil with a maturity exceeding 0.9% is considered rich in mobile hydrocarbons and commercially viable. In contrast, 90% of the Shengli Jiyang shale oil resource has a maturity below 0.9%, placing it in the medium‑to‑low maturity range. Moreover, the area is characterized by complex fault systems, abundant fractures, and widespread formation temperatures exceeding 150°C, making its exploration and development a world‑class challenge with no established precedents to draw upon.

As early as 2006, Shengli’s geologists began exploring for shale oil. However, due to an incomplete understanding of geological patterns and immature engineering and technological capabilities, exploration and development hit a low point, and even collaborative efforts with renowned international oil companies concluded that the prospects held “no commercial value for exploration and development.” Faced with this challenge, Shengli Oilfield opted to pursue a path of independent innovation.

Based on independent innovation, Shengli Oilfield has, through years of sustained research and technological breakthroughs, achieved comprehensive advances spanning theoretical understanding to engineering practice. The research team has collected a cumulative 20,000 meters of core samples and conducted 160,000 analytical tests, while undertaking more than 40 national- and provincial-level research projects. Systematic studies have been carried out on shale reservoir properties, oil-bearing capacity, and hydrocarbon mobility, leading to the development of exploration and development theories such as the “rich accumulation and reservoir‑fracture‑pressure” triad for shale oil in continental rift basins. These contributions have laid a solid theoretical foundation for the exploration and development of shale oil in the Jiyang Basin.

In 2022, the Shengli Jiyang National Demonstration Zone for Shale Oil was officially inaugurated, accelerating the iterative advancement of exploration and development technologies. The research team overcame world-class challenges—namely, the complex tectonics and low evolutionary maturity of continental rift basins, poor shale‑oil fluidity, and the coexistence of high temperature, high pressure, and wellbore instability—while developing six major technological suites, including three-dimensional development, optimized rapid drilling, and efficient balanced fracturing.

In terms of technical performance, the breakthroughs are particularly noteworthy: the drilling cycle for wells reaching 6,000 meters has been slashed from 133 days to just 17 days; average per-well oil production forecasts have exceeded 43,000 tons; and the localization rate of core equipment has risen to over 95%. Through independent innovation, the research team has mastered more than 40 critical technologies, successfully converting 90% of previously untapped shale‑oil resources in the region into high‑quality reserves that can be effectively developed, and has successively delineated three oilfields each with reserves exceeding 100 million tons.

Driven by the development of demonstration zones, the shale oil exploitation in Shengli-Jiyang has demonstrated a robust, large-scale momentum.

The demonstration zone has successively discovered three shale oil fields—Xinxing, Xinhe, and Xinfeng—with 59 wells achieving peak daily production exceeding 100 tons, and a record high of 263 tons. Annual output has surged from an initial 131,000 tons to 700,000 tons by 2025, meeting the targets for reserves and production one year ahead of schedule. This has established an efficient exploration and development model for shale oil in continental rift basins, providing a “model of success” for China’s shale oil revolution.

Since the beginning of this year, capacity development in the demonstration zone has accelerated across the board, with a steady stream of high-producing wells and steadily rising output. The newly commissioned Liye 106HF well is producing 110 tons of crude oil per day. In the first four months of this year, the demonstration zone brought 10 high‑producing wells online, with cumulative shale‑oil production reaching 14,000 tons—up 15% compared with the same period last year.

“We will anchor ourselves to the goal of achieving an annual production capacity of 3 million tons by the end of the 15th Five-Year Plan, deepen the integration of geology and engineering, accelerate the synergy between science, industry, and innovation, and make every effort to expand reserves and ramp up production of Jiyang shale oil on a large scale, while leveraging our demonstration experience to drive nationwide, large-scale onshore shale oil production. In doing so, we will contribute even more significantly to advancing China’s shale oil revolution and safeguarding national energy security,” said Yang Yong, Director of Sinopec Shengli Petroleum Administration Bureau Co., Ltd. and head of the Jiyang Shale Oil Team.

Shale oil resources with a maturity below 0.9% were previously regarded as a “no-go zone” deemed difficult to develop commercially. The reason why the Shengli Oilfield was able to achieve a historic breakthrough despite 90% of its reserves having a maturity of less than 0.9% lies in its successful transition through three critical stages: from “recognizing the no‑go zone” to “technically feasible,” and finally to “economically recoverable.”

From a theoretical perspective, the “Reservoir–Fracture–Pressure” ternary reservoir‑seepage theory developed by Shengli Oilfield has transcended the limitations of conventional shale‑oil and gas geological understanding. It elucidates the mechanisms governing the enrichment and mobility of low‑maturity shale oil within complex structural settings and multi‑fracture systems, thereby providing a robust scientific foundation for exploration and development.

From a technical perspective, the system integration of six key technological suites has transformed low‑maturity shale oil from a theoretical “resource estimate” into an engineering‑defined “recoverable reserve.” This achievement has effectively breached the internationally recognized threshold for commercial development and expanded the resource frontiers for shale‑oil exploration and production. China possesses vast reserves of medium- to low‑maturity shale oil, and this breakthrough will catalyze the exploration and development of similar resources nationwide.

From a technical‑indicator perspective, the drilling cycle for a 6,000‑meter well has been reduced from 133 days to 17 days—a full order of magnitude—representing an almost sevenfold increase in single-well operational efficiency. This shortening of the drilling cycle directly lowers capital‑commitment costs and enhances risk management, which is especially critical for investment‑intensive projects such as deep‑layer shale oil development.

The average predicted oil production per well has exceeded 43,000 tons, indicating that reservoir stimulation effectiveness and individual-well productivity have reached an economically viable level. With the localization rate of core equipment now exceeding 95%, it signifies that China has essentially achieved ultra‑high‑pressure fracturing, Ultra-deep well drilling The independent and controllable development of critical equipment has reduced reliance on imported technologies and mitigated supply-chain risks, while also laying the groundwork for further cost optimization and enhanced market competitiveness.

China possesses abundant shale oil resources, which are primarily concentrated in the Bohai Bay, Ordos, and Songliao basins. Junggar In addition, the five major basins in Sichuan, along with eight medium- and small-sized basins such as Qaidam and Jianghan, have also been found to contain substantial reserves. Shale oil recoverable reserves are estimated at approximately 32 billion barrels, ranking third worldwide.

Academician of the Chinese Academy of Engineering Guo Xusheng It was stated that China’s shale oil resources are predominantly of terrestrial origin, with geological conditions markedly different from those of offshore marine shale oil abroad, resulting in significantly greater exploration and development challenges. Through advances in theory and technology, breakthrough progress has been achieved in recent years, with cumulative proved reserves reaching 1.84 billion tonnes. Last year, national shale oil production exceeded 8.5 million tonnes, and it is expected to soon surpass 10 million tonnes, underscoring a promising outlook for exploration and development.

The Shengli Jiyang Demonstration Zone has now surpassed a cumulative production of 2 million tonnes, with an eye on reaching an annual output of 3 million tonnes. This marks a shift from aspiration to reality in the role of shale oil as a reliable successor for maintaining and boosting production at the region’s mature eastern oilfields. With an estimated resource base of 10.5 billion tonnes—enough to “recreate a new Shengli”—the zone provides long-term support for the strategic replacement of conventional crude oil in the eastern region.

With the orderly development of national-level demonstration zones such as Shengli Jiyang, Daqing Gulong, and Jimusar, China has established the world’s largest onshore shale‑oil development system, with core technologies firmly under domestic control. This has enabled a leap from “technological breakthroughs” to “stable large‑scale production,” making it a strategic cornerstone for safeguarding national energy security.