By Chen Aizhu
March 24 (Reuters) - Chinese oil firm Sinopec will step up shale oil development in the Bohai Bay basin after a successful pilot project, using the resources to help sustain longer-term oil output, its chairman said.
Last year, Sinopec pumped close to 1 million metric tons (about 7.3 million barrels) of oil from the Jiyang trough, part of the basin's ageing Shengli field, one of the state giant's first major shale oil pilot projects.
"Sinopec's shale oil has huge potential," chairman Hou Qijun told a media briefing on Monday. "Next, we will accelerate exploration and production of shale oil resources, by combining technological innovations with capacity building."
SINOPEC WILL EXPAND HORIZONTAL DRILLING
Sinopec will expand horizontal drilling, especially the "multi-layer three-dimensional" development unique to China's shale industry, Hou said.
The Bohai Bay basin's oil resources are comparable to those of the Permian basin in the United States, he added.
The basin covers the offshore Bohai field, now China's most productive, and several other key onshore fields such as Shengli, Liaohe and Huabei.
"The key is to advance the engineering technology to reduce the cost," said Hou, without giving details of shale oil development costs.
Analysts at S&P Global Energy have estimated full-cycle costs of China's shale oil range between $45 and $90 a barrel, higher and more variable than in the United States.
Consultancy Rystad Energy predicts China's shale oil output could double from last year's levels to 120 million barrels to make up 8% of national output in 2035, as Sinopec and PetroChina explore more pilot projects.
(Reporting by Chen Aizhu; Editing by Clarence Fernandez)
((aizhu.chen@thomsonreuters.com; Reuters Messaging: aizhu.chen.reuters.com@reuters.net))
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