1.1 Strengthening the Resource Basis
In recent years, Sinopec has been continuously increasing the investment into the energy sector to accelerate development at home and abroad. By doing so, we have gained access to not only more oil and natural gas resources, but unconventional and renewable resources as well, thus increasing the gross amount of resources and optimizing the energy mix.
◎ Constantly Expanding Investment
Energy development requires consistent and substantial capital input. The past few years have witnessed constantly increasing investment made by Sinopec in the exploration and production of hydrocarbon resources. Our investment in 2011 reached RMB 71.8 billion from RMB 39.4 billion in 2006, with the aggregate investment from 2006 to 2011 exceeding RMB 366.7 billion.
◎Making Efforts to Expand Reserves and Production
In 2011, Sinopec continued to implement the resource strategy of "stabilizing output in eastern fields, expanding production in western areas, accelerating development in southern blocks, pushing forward offshore exploration and development, making breakthrough in unconventional resource development, depending on technologies and building up upstream strength". Great efforts were made to increase the hydrocarbon reserves and output in Shengli, Erdos, Sichuan, Tarim and unconventional resources. Relying on innovation in theories, technology and management, we achieved high quality development with good economic benefits.
In 2011, we made 5 breakthroughs, 8 important progresses, 4 significant discoveries and 10 major results. Measured geological reserves added by 39.23 million tons and that of natural gas added by 22.1 billion cubic meters, both registering substantial growth and strengthening the resource basis for Sinopec. Hydrocarbon production in 2011 amounted to 407.91 million barrels.
In 2011, Sinopec produced 42.73 million tons of crude oil and 14.6 billion cubic meters of natural gas in China while the oil production from the western region increased to 8.466 million tons.
◎Accelerating the Import of Overseas Resources
Faced with the unstable situation in the Middle East and North Africa, Sinopec has pressed ahead with the diversification of its crude import, strengthened international cooperation, explored more sources and mitigated supply risks. We have adopted multiple trade patterns, optimized logistics and transportation and expanded the gross volume of international trade, therefore guaranteeing the stable supply of oil and gas to the domestic market.
In 2011, the gross volume of Sinopec's crude trade reached 234 million tons, up by 25.8% on yearly basis. Meanwhile, Sinopec accelerated the import of overseas natural gas and signed the 6.3 million-ton/year LNG long-term procurement agreements with relevant suppliers.
◎ Diversifying the Energy Mix
Sinopec has placed emphasis on the development and utilization of new types of energy, including the development of unconventional hydrocarbon resources (CBM, shale gas and shale oil etc.) and bio-mass energy (bio-diesel and bio-jet fuel) and the clean utilization of coal.
In 2011, Sinopec achieved significant progress in the exploration of unconventional resources. CBM discoveries were made in Yanchuannan, Zhijin and Heshun blocks while shale gas was found in Jiannan (the west of Hubei and the east of Chongqing) and Yuanba (northeast Sichuan). The first horizontal well for shale oil was drilled in the deeply depressed zone in Biyang Depression in Henan Oilfield.