The Sichuan Basin, rich in gas reserves, is hailed as the "Kingdom of Natural Gas," ranking first in China for both natural gas reserves and production. However, a lesser-known fact is that in the oil and gas sector, Sichuan has long been a "specialist" in gas, while its performance in oil has been consistently poor. The label of "gas-rich, oil-poor" has persisted for decades. In 2023, Sichuan's crude oil production hit a low, with an annual output of less than 20,000 tons, a stark contrast to the 30 million tons produced by the Daqing Oilfield in the same year—only 1/1500th of that figure. Yet, after hitting bottom, a rebound has begun. In recent years, crude oil exploration and development in the Sichuan Basin have seen frequent breakthroughs, with multiple records being set. A new round of oil exploration campaigns is now fully underway.
On May 8th, in Ma'an Town, Yilong County, Nanchong City, the Longye 102H well—the first shale-type shale oil pilot test well by PetroChina Southwest Oil & Gasfield Company—officially commenced drilling. The well is designed to reach a depth of over 5,000 meters, targeting the Jurassic Lianggaoshan Formation, which dates back hundreds of millions of years. Just days later, on May 12th, a new record was set: a daily drilling progress of 1,015 meters. To put this in perspective, the previous highest record in this block was 600 meters per day. "Everyone was thrilled when we saw the drilling progress exceed a thousand meters," said Rao Fujia, the well site manager of Longye 102H, still visibly excited when visited on May 13th.
What is a pilot test well? Rao Fujia explained that it is used to verify technical feasibility and optimize development plans before large-scale commercial development. "We are drilling for shale oil in the Lianggaoshan Formation. Geological predictions suggest that Lianggaoshan has great potential. Now, we need to verify whether there is oil down there." Shale oil, an unconventional petroleum resource trapped within shale formations, is seen as a crucial alternative for maintaining China's long-term crude oil production stability. PetroChina's deployment of seven shale oil pilot test wells in the Yilong area of Nanchong reflects confidence in the block's potential for increasing reserves and production. "The fact that only a few wells in Southwest Oil & Gasfield have designated well site managers underscores the importance of this well," Rao Fujia noted.
The drilling operation is handled by the 70229 drilling team of Chuanging Drilling. Team leader Li Changjin, with over a decade of experience drilling gas wells, is working on an oil well for the first time. "Drilling a conventional gas well used to take about a year. Now, for oil wells, we aim to complete drilling in just over 30 days. The pace is incredibly fast," Li said. What drives this rapid progress? Rao Fujia attributes it to the high-level support from Southwest Oil & Gasfield. To enhance the efficiency of pilot test wells in the Longgang area, the company established an integrated on-site working group and a well site manager system, with management personnel stationed on-site to oversee operations, implement drilling acceleration measures, and optimize workflows. "Everyone is determined to strike oil," Li Changjin shared, expressing his anticipation. When he first started drilling, he heard stories from veteran team leaders about striking oil in Suining's Anju in the 1980s, where the oil could be directly used in motorcycles. "But in my over ten years on the job, I’ve never seen what oil looks like," he admitted.
Shale oil carries high expectations. A clear signal of this is the formal establishment of the Crude Oil Division by Southwest Oil & Gasfield at the end of 2025, with Tang Qingsong appointed as its manager. Tang Qingsong previously oversaw natural gas production in the Development Management Department. In 2023, he was tasked with taking on oil projects part-time. Initially, he was puzzled: "At that time, the entire company was focused on increasing natural gas production to 50 billion cubic meters. Why would I be assigned to work on oil?" However, after leading his team to delve into data, conduct field surveys, and hold discussions, he realized that crude oil development was not only feasible but also held great promise.
Sichuan is the birthplace of New China's large-scale oil exploration campaigns. Over the past 60 years, Southwest Oil & Gasfield has discovered multiple crude oil reservoirs and put over a thousand wells into production. However, due to limitations in geological understanding and engineering technology, fewer than a hundred wells are actively producing crude oil. Why establish a Crude Oil Division? Tang Qingsong believes it is both a return to roots—Southwest Oil & Gasfield was founded for oil and thrived on gas, with "finding oil fields" being the long-held dream of generations of oil workers—and a demonstration of determination. Establishing a dedicated division aims to extract oil from the ground when the nation needs it most.
Currently, Southwest Oil & Gasfield has set a clear development target for crude oil: "increasing reserves by 100 million tons and boosting production by one million tons." While solidifying its position as China's second-largest gas field and striving to become the largest, the company is also making concerted efforts to advance its crude oil sector. The vision of "simultaneous development of oil and gas" and "prosperity in both oil and gas" holds promising prospects.
In recent years, the Sichuan Basin has witnessed a new narrative for crude oil: - Bazhong Pingchang Oilfield: In September 2024, the reserves of the Ping'an 1 block were reviewed and filed by the Ministry of Natural Resources. By 2025, Bazhong's prospective oil resources were estimated at approximately 2.5 billion tons, with annual oil production reaching 22,000 tons, a year-on-year increase of over 360%. - Chongqing Fuxing Oilfield: In July 2025, the first phase of proven oil reserves exceeding 20 million tons passed review, making it the first shale formation oilfield in the Sichuan Basin. - Nanchong Shunqing Oilfield: In December 2025, newly added proven crude oil reserves exceeding 20 million tons passed review, marking the birth of the first tight oilfield in the Sichuan Basin.
On May 10th, the latest news arrived: all pilot test wells for the first development pilot program of Jurassic crude oil in the central Sichuan region, located in the Shunqing Oilfield, have been completed. Through the phased implementation and technological iteration of nine pilot test wells, preliminary technical policies for the zonal and classified development of Jurassic crude oil in central Sichuan have been established. These achievements provide a technical basis for high-quality replication and promotion in the future.
Currently, teams from PetroChina's Southwest Oil & Gasfield and Daqing Oilfield, as well as multiple teams from Sinopec, have once again gathered in the Sichuan Basin, launching a new round of oil exploration campaigns. PetroChina has integrated professional forces in oil and gas exploration and development, geophysical prospecting, well logging, and scientific research to establish a crude oil production consortium, focusing on original technological breakthroughs.
Why has the shift in focus to crude oil exploration and development led to breakthrough progress? To answer this, one must first address: why was oil not found in the past? "The approach was wrong," said Yang Yi, Deputy Director of the Geology and Engineering Department of the Crude Oil Division at Southwest Oil & Gasfield, speaking candidly. He explained that past oil exploration followed a "source-external" approach—searching for areas where oil and gas migrated and accumulated, akin to looking for "children." "But the geological structure of the Sichuan Basin is too complex, making it difficult to find these 'children.'"
Now, the approach has changed. "We have shifted to 'source-internal' exploration—directly targeting the hydrocarbon source rocks that generate oil, or finding the 'mother,'" he analogized. "In the past, hydrocarbon source rocks were thought to be like a chicken that lays eggs and is done. Later, we realized that this chicken still has many eggs inside." This shift in understanding has directly opened new prospects for increasing crude oil reserves and production in the Sichuan Basin.
The favorable areas for crude oil in the Sichuan Basin span approximately 50,000 square kilometers, concentrated in the triangular region of central Sichuan, northeastern Sichuan, and eastern Sichuan. Vertically, there is a "five-story" structure—the entire Jurassic sedimentary system, including the Shaximiao Formation, Lianggaoshan Formation, Da'anzhai Formation, Dongyuemiao Formation, and Xujiahe Formation, all of which contain oil.
The focus of crude oil development has shifted from conventional oil to unconventional sources like shale oil and tight oil, building on the breakthroughs in shale gas and tight gas exploration and development. Shale oil and shale gas share highly similar technical routes: horizontal drilling + volume fracturing + long horizontal sections. However, shale oil has a natural advantage—shallow burial depth. Shale gas reservoirs are typically buried at depths of 3,500–4,500 meters, while shale oil reservoirs are only 2,000–3,000 meters deep, allowing for faster development and production.
Challenges remain. "Our current technology is termed shale oil 2.0, which can support development but is not highly profitable," Tang Qingsong admitted. "We are right at the breakeven point—neither making nor losing money." What is the solution? Two paths: reduce costs and increase EUR (estimated ultimate recovery). How to achieve this? By setting strict constraints from the start. "We are not repeating the high-cost path of shale gas in its early days. From the beginning, we set limits: if a well can only produce 20,000 tons of oil, we can only invest 20 million; if it can produce 50,000 tons, we can invest 50 million. All parties, whether client or contractor, operate within this framework." From its inception, the Crude Oil Division made "cost reduction" its first survival principle.
The goal is clear: by 2030, Southwest Oil & Gasfield's annual crude oil production will reach 500,000 tons. This means that in five years, annual production will increase more than tenfold. Meanwhile, crude oil production in the Sichuan Basin is expected to reach one million tons by the end of the "15th Five-Year Plan" period.
At the Longye 102H well site, the belief of Rao Fujia, Li Changjin, and all on-site personnel is even more resolute than the roar of the drilling rig. "We will succeed!" their words ring with conviction. Can Sichuan, long labeled "gas-rich, oil-poor," defy the odds and rewrite its destiny? The answer awaits.
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