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Qiqihar Operations
Qiqihar
In February 2007, PetroAsian acquired a 51% equity interest in Northeast Oil China Development Company Limited in order to diversify into the oil exploitation sector. Northeast Oil is developing an oil exploitation business in parts of Fu 710, Fu 718 and Meilisi 723 districts in Fulaerjiqu Oilfield located in Qiqihar City, Heilongjiang Province, with a total production area of 34 km2.
Current operations include the drilling of 22 wells, of which 9 are already producing while the rest are still in completion. Starting May 2009, PetroAsian has taken over the Qiqihar oilfields for self-operation, and its own team will operate the oil field according to international standards. The team will report to PetroAsian headquarters in Hong Kong on a daily basis.
Rather than contracting out the oilfield operations to its partners before, PetroAsian Energy started self operating its Qiqihar oilfield in China with its own crew since June 2009. The new technical team strongly emphasized improved oil recovery as its main priority. Cao Quan is now acting as General Manager of the oilfield, assisted by operations manager Sun. Mr. Cao is featured in this month’s management profile.
Professor Kwong recently went to Alberta, Canada to consult with NCUT (National Centre for Upgrading Technology), a renowned government-based technical think tank with specific expertise in dealing with heavy crude oil. It was decided that a new oil extraction method was needed so that the Qiqihar oilfield could be more efficiently run and become more productive. New advances in technology have allowed for additional recovery of oil in otherwise abandoned oilfields. PetroAsian intends to use a specific type of thermal enhanced oil recovery technique to boost production at its Qiqihar oilfield, as it contains cold, waxy crude (API 23°).(Note: API stands for American Petroleum Institute)
API gravity (in degrees) measures the relative density of crude oil:
- 31.1 °API or above : light oil (low wax content)
- 22.3 °API to 31.1 °API : medium oil
- 22.3 °API or below : heavy oil (high wax content) high density means it does not flow as easy as light oil
Cyclic steam stimulation, otherwise known as “Huff and Puff”, is a single well operation for crude oil enhancement. First, steam and hot water is injected into the well for period ranging from a couple days to a couple weeks, and is left there to heat up the oil reservoir, a term which is called “soaking”. This process allows heat to radiate throughout the reservoir and reduces the viscosity of oil, thereby allowing the oil to become more mobilized and improving the efficiency of the pumping mechanism. This process is repeated every 3 – 4 months, and can dramatically increase production several fold for each well. PetroAsian estimates that production for each well could be increased to between 2 and 8 tons per day. In fact, this extraction method has been used in the nearby Daqing oilfields and has yielded favorable results. In addition to steam, this recovery method can employ additional chemical dilutants to further increase productivity within the field.
