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Natural Gas Industry B 5 (2018) 60e74
www.elsevier.com/locate/ngib
Research Article
Shale gas exploitation: Status, problems and prospect

Wang Shiqian
Research Institute of Petroleum Exploration and Development, PetroChina Southwest Oil & Gas Field Company, Chengdu 610051, China
Received 8 May 2017; accepted 25 June 2017
Abstract
Over the past five years, great progress has been made in shale gas exploitation, which has become the most driving force for global gas
output growth. Hydrocarbon extraction from shale helps drive the USA on the road to energy independence. Besides, shale oil & gas production
has been kept in a sustained growth by continuous improvement in drilling efficiency and well productivity in the case of tumbling oil prices and
rig counts. Shale gas reserves and production have been in a rapid growth in China owing to the Lower Paleozoic Wufeng and Longmaxi shale
gas exploitation in the Sichuan Basin, which has become an important sector for the future increment of gas reserves and output in China.
However, substantial progress has been made neither in non-marine shale gas exploitation as previously expected nor in the broad complicated
tectonic areas in South China for which a considerable investment was made. Analysis of the basic situation and issues in domestic shale gas
development shows that shale gas exploitation prospects are constrained by many problems in terms of resources endowment, horizontal well
fracturing technology, etc. especially in non-marine shale deposits and complicated tectonic areas in South China where hot shales are widely
distributed but geological structures are found severely deformed and over matured. Discussion on the prospects shows that the sustained and
steady growth in shale gas reserves and production capacity in the coming years lies in the discovery and supersession of new shale plays in
addition to Wufeng and Longmaxi shale plays, and that a technological breakthrough in ultra-high-pressure and ultra-deep (over 3500 m buried
in the Sichuan Basin) marine shale gas exploitation is the key and hope.
© 2017 Sichuan Petroleum Administration. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND
license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Keywords: Shale gas; Exploitation; Marine facies; Hot shale; Resource endowment; Sichuan Basin; South China; Complicated tectonic area; Gas play
1. Introduction period, the cumulative proved marine shale gas reserves in

China amounted to 5441 108 m3, and the production of
During the “12th Five-Year Plan” period, China learned marine shale gas in 2015 was 45 108 m3 [1]. Shale gas has
successful experiences in “shale gas revolution” of North gradually become an important sector for the future increment
America and made great progress in the shale gas exploitation of gas reserves and output in China, and made China one of
through sustained endeavor and field tests on the technologies the only four countries that have realized commercial devel-
to recover the Lower Paleozoic marine shale gas in the opment of shale gas around the world (Fig. 1) [1e4]. However,
Sichuan Basin. Along with the successive discovery and continental and marineecontinental transitional shale gas,
confirmation of the Upper Oligocene WufengeLower Silurian which was believed to have a great potential in the shale gas
Longmaxi shale gas in the blocks such as Fuling, Weiyuan, investigation in the early “12th Five-Year Plan” period, was
Changning, and FushuneYongchuan in the Sichuan Basin, not satisfactorily explored and was deemed to be limited in
China's shale gas reserves and production have grown vigor- potential. The continental and marineecontinental transitional
ously from zero. Up to the end of “12th Five-Year Plan” shale gas resources predicted in 2015 were much less than that
in the early “12th Five-Year Plan” period, suggesting an un-
certain prospect [5,6].
E-mail address: [email protected]. During the “12th Five-Year Plan” period, marine shale gas
Peer review under responsibility of Sichuan Petroleum Administration. exploitation in the Sichuan Basin gained a significant
https://doi.org/10.1016/j.ngib.2017.12.004
2352-8540/© 2017 Sichuan Petroleum Administration. Production and hosting by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Wang SQ / Natural Gas Industry B 5 (2018) 60e74 61
revolution” in the North America. Although only four countries

have realized the commercial shale gas exploitation (Fig. 1), it
is believed that more and more countries will join the sector
along with the technical progress and the constant improve-
ment of policies, markets and infrastructures.
EIA's prediction in 2016 [2] showed that the global daily
natural gas production would increase from 97 108 m3 in
2015 to nearly 157 108 m3 in 2040, among which shale gas
would make the greatest contribution e being tripled from
2015 to 2040, when shale gas production would account for
30% of global natural gas production, and China would rank
as the second largest shale gas producer only after the USA.
Fig. 1. Shale gas production of four shale gas producing countries in 2015.
Note: The data are sourced from Refs. [1e4], and the data of USA refer to dry
Besides the four countries producing shale gas, Algeria and
gas production. Mexico will cooperate with IOCs to produce shale gas
commercially around 2020 and 2030 respectively. By 2040,
breakthrough and the commercial productivity was realized these six countries will totally contribute 70% to global shale
soon after commissioning. Accordingly, the future shale gas gas production. Clearly, future natural gas production growth
exploitation in the periphery of the Sichuan Basin and even in mainly relies on shale gas, and global shale gas production
the whole South China is highly expected. On one hand, the growth mainly depends on China and the USA. In China, key
National Energy Administration (NEA) adjusts shale gas shale gas production and breakthrough are expected in the
production in China at the end of “13th Five-Year Plan” period marine shale areas in the southern part of the country [1].
from (300e600) 108 m3 to 300 108 m3, while some
scholars propose that a target of 200 108 m3 by 2020 is more 2.2. Shale oil/gas exploitation has led the USA towards
rational [5,7]. On the other hand, an optimistic opinion con- energy independence
siders a production of 300 108 m3 a little conservative and
suggests defining the 45 104 km2 range covering Sichuan, In the USA, since the discovery of Barnett shale gas play in
Chongqing, Yunnan, Guizhou, Hunan and Hubei, including the early 1980s, 13 shale oil/gas plays have been put into
the Sichuan Basin, as a “Special Shale Gas Zone”. If so, commercial development [12], and shale gas development has
China's shale gas production by 2020 is expected to reach grown swiftly especially from the beginning of the 21st cen-
1000 108 m3 [8]. Anyway, all of these viewpoints are based tury. The substantial growth of natural gas production in the
on an optimistic prediction on shale gas in the whole South country is mainly contributed by shale oil/gas. The annual
China, although exploration practices and research achieve- production of shale gas (only dry gas) increased quickly from
ments in shale gas licenses during the “12th Five-Year Plan” nearly 100 108 m3 in 2000 to nearly 4000 108 m3 in 2015,
period have revealed that shale gas exploitation in many accounting for 50% of the total annual natural gas production
complex structural areas in the South China, other than the in the USA [13]. The Annual Energy Outlook 2016 of EIA [3]
Sichuan Basin, is susceptible to huge geologic risks and en- shows that the imported natural gas of USA was 283 108 m3
gineering challenges, and the economy of commercial shale in 2015, and the supply and demand were basically in balance,
gas development is also uncertain [5,6,9,10]. However, it with a difference of only 3%; it is anticipated that in 2018 the
seems that some departments are too optimistic about marine USA will become a net exporter of natural gas for the first time
shale gas exploitation in South China, especially in complex since the 1950s, and in 2040 the gap between the oil pro-
structural areas, when they make shale gas development duction and consumption in the USA is only 7%, and the daily
planning, being less aware of the problems therein. Under this import only is 1.5 million barrels. Therefore, the USA is now
background, for the sake of orderly development of shale gas realizing energy independence by virtue of scale exploitation
in the future, it is necessary to comprehensively review the of shale oil/gas. In the past years, under the circumstance of
current status of shale gas exploitation in China and abroad tumbling oil prices, some new characteristics are observed in
and identify the problems therein. shale gas exploitation in the USA.
2. Basic situation and characteristics of shale gas 1) Shale gas production in the USA can still increase stably
development abroad year by year under the circumstance of tumbling oil
price, and will keep the trend of stable growth in the
2.1. Shale gas exploitation has become the main driving following years (2016e2040) [3]. This is benefited from
force of global natural gas production growth the unique and unduplicated resource and market con-
ditions in the USA as well as the constant progress of the
According to the EIA evaluation in 2013, globally, shale gas low-cost high-efficient shale oil/gas development tech-
was extremely rich, and technically recoverable shale gas re- nologies [13], rather than the so-called industrial policy
sources were up to 206.56 1012 m3 [11]. Thus abundant shale guidance, support or stimulation highlighted by the do-
gas resources laid a solid material foundation for the “shale gas mestic opinions.
62 Wang SQ / Natural Gas Industry B 5 (2018) 60e74
2) Since the beginning of the 21st century, especially in the production in seven shale gas plays including Barnett,
low oil price period, the rapid and sustained development and from 80% to 90% in the first three years [16].
of shale gas in the USA firstly benefited from the rich and Therefore, in order to keep shale gas production stabil-
highly endowed shale gas resources. Due to the devel- ity, it is required to drill new wells to make up the rapid
opment technology and practices in the Barnett shale gas production decline of old wells. However, when the oil
play which was first developed, “shale gas revolution” price goes down, oil companies will inevitably lessen the
spreads quickly throughout the USA, resulting in more rigs to reduce the shale oil/gas development cost. Ac-
and more shale gas discoveries in the petroliferous ba- cording to the data published by Baker Hughes, the
sins. In 2014, the technically recoverable shale gas re- number of rigs in the USA decreased from 1859 in
sources exceeded 17 1012 m3, and the proved reserves November 2014 to 951 in April 2015, while shale oil/gas
reached 5.65 1012 m3 [6]. According to the EIA data production didn't descend but ascended [17]. Under the
announced in 2016, there are seven shale gas plays situation of falling oil price and reducing rigs, oil
(namely the first seven gas plays from left to right in companies took some effective measures to realize sta-
Fig. 2) with an annual production exceeding ble production growth and low cost of commercial
200 108 m3 in the USA, among which four large shale development. First, they focused the development on the
gas plays (i.e. Marcellus, Eagle Ford, Haynesville and high-quality resources in the “core plays”. Through in-
Barnett) delivered an annual production more than tegrated geological-engineering evaluation on shale gas,
300 108 m3, accounting for 70% of the total shale gas they selected the “core plays” with higher production
production in the USA. In addition, owing to the sharing and better profit for exploitation. They deployed the
of shale gas exploitation experiences among oil com- limited rigs in the “core plays”, so as to avoid a great
panies and the duplication of advanced technologies, the decline of shale oil/gas production because of less dril-
period that shale gas play can be put into scale produc- ling workload. Second, they reduced expenditure and
tion is greatly shortened. The horizontal drilling and improved operation efficiency. Some oil companies
completion technology and gas reservoir management reduced the quantity of staff and rigs, and allocated the
experience developed in the Barnett shale gas play are remaining staff and rigs to high-quality projects, so
copied in other plays successfully with better results. The drilling time-efficiency was greatly enhanced. Accord-
data statistics show that the Fayetteville shale gas play in ing to the statistics [17], the drilling time in the Eagle
the Arkoma Basin commissioning in 2007 reaches a daily Ford and Permian Basin shale gas plays was shortened
production of 2700 104 m3 that takes 22 years in the by 5e10% and 20% respectively. The rigs in the Hey-
Barnett shale gas play. The Haynesville and Marcellus nesville shale gas play in 2015 was less than the odd-
shale gas plays developed after Barnett have exceeded ments in 2011, and the production declined by 40%, but
the highest annual production of 500 108 m3 of Barnett the shale gas production efficiency in 2015 was higher
in 2011 and 2012 respectively, and replaced the overlord than that in 2011. What's more, the drilling time-
of Barnett that yields the highest production in the first efficiency in the major shale gas plays, such as
decade of the 21st century. Bakken, Marcellus and Eagle Ford, improved greatly in
3) Hughes analyzed 65000 shale gas production wells and recent years, with the exploitation cost declining year by
found that the shale gas production decline rate ranged year [18]. In the Marcellus shale gas play, the rig number
from 23% to 49% on average in the first year of dropped from 144 in 2012 to 98 in 2015, but the
Fig. 2. Annual production of major shale gas plays in the world. Note: The data abroad are sourced from Refs. [14,15], and the domestic data from Ref. [1]. Except
for the Monteney and Muskwa shale gas plays in Canada of which the production data are shale gas production from 2011 to 2012, those of other plays are the data
in 2015.
production was more than doubled. Third, they effec- 2.3. Although there are shale gas resource discoveries in
tively reduced the production cost by technical innova- some host countries, commercialization is still a long
tion. Under the situation of tumbling oil price, many oil way to go
companies devoted to realizing higher production with
less wells by virtue of new technologies and new In the early 21st century, the commercial triumph of shale
methods. The enhancement of shale oil/gas production gas exploitation in the North America rapidly spread to other
per well brought the improvement of economic profit. In countries with rich shale gas resources, such as Poland with
terms of drilling operation, a platform well-plant mode special geo-politic meaning in Europe, Mexico and Argentina
was adopted with the support of intelligent rigs with a in Americas, South Africa in Africa, China and India in Asia,
dual fuel translation system, which greatly shortened the and Australia etc. [11] except a few countries like China and
drilling period and reduced the drilling cost. In terms of Argentina where commercial development of shale gas has
stimulation treatment, the technologies of horizontal been initiated, other countries are just slow and even stagnant
well “zipper” fracturing and re-fracturing were usually in the development of shale gas, although they have obtained
adopted; with optimized well track and completion discoveries in shale gas exploration [20].
techniques, single-well EUR increased distinctively. According to shale gas drilling and evaluation, the pre-
Production practices demonstrate that these measures dicted shale gas resources are very rich in some countries, but
are effective in the low oil price era and can reduce the their shale gas resource endowment is far less than USA. In
break-even price year by year for a majority of shale oil/ addition to complex geological conditions, these countries
gas plays in the USA [18]. For example, the single well lack shale gas exploitation technologies and experiences, well-
cost in the Heynesville shale gas play ranks the highest trained and qualified professionals, drilling/fracturing facilities
(almost USD10 million [12]) in the large shale gas plays and surface facilities. Furthermore, there are no competitive
in the USA, but the operation cost reduced by about 25% service markets. As a result, shale gas development effect is
through technical innovation. The statistics show that the not up to the expectations and the drilling cost is too high. In
gas price at the break-even point in the Heynesville shale such countries as Mexico and Australia, the commercial
gas play generally declined by USD0.3e0.4/1000 ft3 development of shale gas has not been initiated even after
(1 ft3 ¼ 0.0283168 m3, the same below) from 2014 to shale gas discoveries are made. Because the anxiety about the
2015, or even by USD0.5/1000 ft3 in some plays. wastewater treatment and environmental impact as well as
4) According to the 2016 outlook of EIA [3], the rising earthquake induced by fracturing cannot be eliminated, some
tendency of shale gas production in the USA will European countries, such as France and Sweden, don't support
continue to 2040. Shale gas production growth in the shale gas development or limit the application of shale gas
USA at present and in the future is mainly contributed fracturing with laws and regulations.
by two shale gas zones in the eastern Appalachian As is known, the predication of shale gas resources or
Basin, i.e. Marcellus and Utica, which produced shale production is controlled by prediction methods, precision and
gas of about 1650 108 m3 in 2015, accounting for assumptions etc. As mentioned above, the global shale gas
43% of the total shale gas production in the USA, and resources published by EIA from 2011 to 2013 are doubted to
will exceed 50% in 2040, when daily production rea- some extent [9,16,19]. Some countries that were deemed with
ches 11.32 108 m3. rich shale gas resources in the evaluation of EIA sharply
5) When it comes to the future of shale gas, some inde- lowered their expectations of shale gas exploration after pre-
pendent agencies in the USA hold the opinions quite liminary drilling and evaluation. Poland is one of the most
different from the prediction of EIA. A research team active countries developing shale gas in the world, and it
consisting of 12 geologists, reservoir engineers and launched five shale gas projects including the Baltic Basin
economists from the University of Texas at Austin early in 2010, attracting the participation of many IOCs. After
conducted a systematic research on four shale gas plays the IOCs, such as Chevron and Exxon Mobile, drilled many
(Marcellus, Heynesville, Fayetteville and Barnett) for exploratory wells, the testing productivity was low and could
three years. The team adopted a production prediction not reach the industrial standard, hence shale gas development
method with a precision at least twenty times that of EIA in Poland was suspended. Considering the shale gas devel-
prediction, and concluded that the gross shale gas pro- opment effect lower than the expectation and the lower limit of
duction of these four plays will reach a peak in 2020 and TOC > 2%, EIA reduced the technically recoverable shale gas
then decline rapidly, and only half of the EIA predicted resources in the Lubin Basin of Poland from 1.25 1012 m3 in
production in 2030 [19]. This is apparently pessimistic 2011 to 0.25 1012 m3 in 2013 [11] (Fig. 3). Shale gas re-
in comparison with the predictions of EIA and Goldman sources in Poland predicted by Polish Geological Institute
Sachs etc. The Post-Carbon Institute also analyzed the were not up to 1/10 of EIA's prediction in 2011 [19]. Ac-
production decline in five shale gas plays including cording to the prediction of EIA in 2011, the technically
Marcellus and concluded that the prediction of EIA is recoverable resources of Alum shale gas in Norway were
over optimistic [16] and that the prediction of the 2.35 1012 m3. Shell drilled three exploration wells in the
Institute on shale gas production in the USA from 2014 Alum shale with better geologic conditions in Sweden, but
to 2040 is 46% lower than that of EIA. failed to get any gas. It is thus inferred that the commercial
Fig. 3. Shale gas resource evaluation by EIA from 2011 to 2013. Note: Data in the histogram are sourced from Ref. [11].
success upon the complicated Alum shale gas in Norway is not the “12th Five-Year Plan” period, breakthroughs have been
as good as the previous prediction, and in the global shale gas made in terms of marine shale geologic evaluation method,
resource evaluation report published by EIA in 2013, the drilling/completion and fracturing technology, and shale gas
technically recoverable shale gas resources in Norway were reserves and production management [1]. Some departments
cut down to none (Fig. 3). and scholars have summarized the major achievements in
Therefore, the results of shale gas resource evaluation China [1,5,6,21], which will not be repeated herein. The au-
conducted in the play evaluation and selection period will be thors proposed the following remarkable characteristics from
ultimately verified by drilling and dynamically adjusted or different aspects.
revised with the E&D progress to suit the E&D practice.
Overestimate on shale gas resources will possibly bring about 3.1.1. Multiple policies, quick implementation and great
an over-high expectation on the shale gas future. Thus the investment
exploration commitment and investment as well as the E&D Since shale gas was listed as an independent mineral cate-
index will be increased, resulting in a giant waste of human gory at the end of 2011, relevant authorities have issued some
resources and materials. The evaluation result of shale gas policies successively, such as Shale Gas Development Pro-
resources in Poland by EIA is a typical example, and there is gram, Shale Gas Development and Utilization Subsidy Policy,
the same problem in China (to be elaborated later). and Shale Gas Industry Policy, in order to encourage and speed
up domestic shale gas development. Some local governments
3. Basic situation and problems of domestic shale gas owning shale gas resources also have issued documents related
development to shale gas exploitation and industry development in the “12th
Five-Year Plan” period and the “13th Five-Year Plan” period,
3.1. Remarkable shale gas progress in the “12th five- where shale gas is regarded as an important industry to promote
year plan” period and a long-way-to-go future the local economic development and boost GDP growth, and
development they set up shale gas development companies. In addition to
CNPC, Sinopec, CNOOC, and Yanchang Oil, more than 10
Shale gas exploitation in China started from the Lower investors including some private enterprises are attracted in
Paleozoic marine shale in the Sichuan Basin in 2009, and shale gas exploitation through two rounds of shale gas license
rapidly spread to marine, continental and marineecontinental bidding. Compared with other countries and conventional oil/
resources in South China and even the whole country in the gas or coalbed methane (CBM), the Chinese government pro-
“12th Five-Year Plan” period. Especially, under the guidance vides a really grand support to the shale gas industry. The main
of many shale gas policies issued by the government, an up- possible factors controlling shale gas development in the future
surge of shale gas exploitation emerged with the guidance of are not related to policy or mechanism.
governments at all levels, participation of multiple investors, Up to the end of 2015, the national cumulative investment
and engagement of non-oil enterprises like power and coal was RMB36.5 billion, including RMB1 billion from central
enterprises, thereby a rapid development of shale gas industry and local finances as well as RMB2 billion from the bid-
in China has been promoted. In the 44 shale gas exploration winning enterprises, and the remaining is all from oil com-
license blocks (including 21 bidding blocks) covering an area panies. However, in terms of the inputeoutput, all investments
of 14.4 104 km2, triggered by the exploration evaluation in were not recovered with shale gas production, expect for the
oil companies' RMB33 billion which corresponded to a cu- fracturing, a great majority of wells only reveal “good gas
mulative shale gas of 60 108 m3 [21]. Under the current shows in testing”, “high desorption gas or gas content” and
technical and market conditions, domestic shale gas exploi- “successful flaming or ignition” [21], with no substantial
tation is featured by large input, high risk, long return period, breakthrough.
slow effect and low profit; some local governments or non-oil The Jurassic and Upper Triassic formations are key targets
companies regard shale gas as an important industry to gain for continental shale gas exploitation in China. The Jurassic is
commercial profit, which isn't a smart choice. dominant among all the formations with recoverable shale gas
resources up to 5.54 1012 m3 [22], mainly in the north-
3.1.2. Rapid production of marine shale gas within the western China and the Sichuan Basin. In the Yan'an National
basin, and successful “testing ignition” outside the basin Continental Shale Gas Demonstration Area, for example, there
During the “12th Five-Year Plan” period, petroleum and are tens of wells, but only half of them have obtained gas after
petrochemical enterprises closely followed the progress of fracturing; horizontal well production is generally only
shale gas exploitation technology in the USA, and actively (0.4e0.8) 104 m3/d in testing, and the wells can't be put into
developed unconventional oil/gas business. They quickly formal development due to unstable production and quick
initiated and increased the investment in the Paleozoic marine decline; at present, only one gas well is producing for power
shale gas exploration and development in the Sichuan Basin, generation [6,21]. This can be proved by the fact that this area
and finished the construction of three national marine shale is classified as an “evaluation breakthrough region” rather than
gas demonstration areas (ChangningeWeiyuan, Fuling and a “key productivity building region” in the “13th Five-Year
Zhaotong) with an annual productivity of 75 108 m3. The Plan” [1]. Well Chaiye 1, one of the important shale gas dis-
great growth of shale gas reserves and production brought coveries in 2014, is the first well drilled to develop continental
about the exploration and development technologies for ma- shale gas in Jurassic in the Qaidam Basin [21], and it reveals
rine shale gas below 3500 m and the profitable exploitation of three sets of shale interval with high gas content and cumu-
marine shale gas. Nevertheless, in some deeply buried shale lative thickness of 141 m, of which the site desorption gas
gas strata (below 3500 m) inside or around the Sichuan Basin content is up to 2e5 m3/t, the highest shale gas content is
or in the complicated tectonic areas, exploitation faces dual about 9 m3/t, and the core desorption gas is successfully
challenges of both technology and economy. “ignited”. According to the data of GSC, sand fracturing was
According to the national shale gas resource investigation carried out in two sets of gas-bearing shale with a total
results [22], the central finance, local governments and bid- thickness of 60 m and the highest gas content, but there was no
winning enterprises have invested more than RMB3 billion gas flow during the flowback. Some discoveries even found
in shale gas exploration and development in South China with some wells (mostly unstimulated vertical wells) widely re-
rich resources, in addition to the Sichuan Basin, including over ported domestically with high yield of shale gas in continental
50 exploration wells. Unfortunately, there is no commercial or marineecontinental formations, which should be assigned
discovery made, except for the lately reported Well Anye 1 to tight carbonate gas or tight sandstone gas, are collectively
[23] in northern Guizhou and a few exploration wells which incorporated into the achievements of shale gas, since sand-
delivered a little shale gas flow (not up to the standard of in- stone (or carbonate rock) and shale are interbedded or super-
dustrial gas well). Over 3e4 years, the efforts in many shale imposed in continental or marineecontinental formations [9].
gas blocks remained to demonstrate “whether there is hot Although there were attempts on the shale gas exploitation in
shale or not” and “whether the shale contains gas or not”, but the Upper Triassic Xujiahe Fm and Lower Jurassic Ziliujing
no recoverable shale gas resources under the current technical Fm in the Sichuan Basin during the “12th Five-Year Plan”
and economic conditions were confirmed and no block of period, and even the Jurassic continental shale gas exploitation
shale gas with commercial value was found. Facing the huge in the Fuling block was earlier than that of the Longmaxi
financial pressure and investment risk as well as “crop failure”, marine shale gas, no breakthrough has been made or no scale
many shale gas enterprises were impaled in a dilemma and productivity has been built due to shale gas resource endow-
difficult to take a step. ment, horizontal well fracturing, and production testing per-
formance in continental formations.
3.1.3. No substantial breakthrough in the exploration of
continental and marineecontinental shale gas 3.2. Shale gas exploitation in the complex tectonic areas
When marine shale gas in South China advances inten- in South China
sively, the Geological Survey of China (GSC) and some pro-
specting and oil companies actively conduct shale gas During the “12th Five-Year Plan” period, 17 coal-fired
exploitation in favorable zones of continental and marine- power-dominated winners in the first and second rounds of
econtinental facies with a great potential, which lives up to bidding for shale gas licenses conducted shale gas exploration
great expectations. In recent years, the drilling results in the in 21 blocks covering an area of 2.4 104 km2. Particularly,
CarboniferousePermian and TriassiceJurassic coal beds as 19 of these blocks were marine shale gas blocks in the
well as lacustrine sand-mudstone in the southern North China, complex tectonic areas in South China, outside the Sichuan
the Ordos Basin and the Sichuan Basin show that except some Basin. Under the “13th Five-Year Plan”, key substituting
exploration wells with low-yield shale gas flow after blocks for future shale gas exploitation are concentrated in
marine shale gas blocks in the complex tectonic areas in 3.2.2. General existence of gas in shale but with limited
South China, with the target being unexceptionally the recoverable resources
WufengeLongmaxi [1]. According to the petroleum geologic theory, shale gas is the
All these blocks are beyond their three-year exploration residual in-place gas after natural gas generated in source
period, but no enterprise has completed (and actually cannot rocks under temperature and pressure conditions is expulsed
complete) its original exploration obligations, and two winners and migrated (Fig. 4). Therefore, conventional oil/gas is also
in the first round were even penalized economically. Practices called “outside-source oil/gas”, and shale oil/gas is called
show that these shale gas blocks are basically featured by “inside-source oil/gas”. Once source rocks reach a certain
presence of shale without gas, or no gas flow, or no com- maturity, some residual gas always exists, no matter what the
mercial flowrate, and investment without return, making the expulsion and transport conditions are. Accordingly, during
enterprises impaled in the dilemma. In order to better arrange the drilling operations of all shale gas wells, both inside and
the work during the “13th Five-Year Plan” period and there- outside the basin, there are always oil/gas shows in the high
after, it is necessary to review the exploitation operations over GR black shale intervals, such as anomaly in gas logging,
the past years and figure out the problems. increased gas content and even well kicking, and other com-
mon phenomena such as gas flow-out when cores are taken
3.2.1. “Rich shale” meaning no “rich shale gas” out, bubbling in the water and ignition of gas desorbed on site.
One of the achievements in drilling geological information However, these ubiquitous “shale gas shows” are widely re-
wells, reference wells and exploration wells in the shale gas ported as great discovery or breakthrough that can prove the
blocks in South China lies in the wide distribution of black hot “presence of shale gas”. Theoretically, the “presence of shale
shale in the WufengeLongmaxi and Lower Cambrian Niuti- gas” is not necessarily proved by wells consistently, but can be
tang formations. In fact, such distribution was previously confirmed with basic oil/gas geology. The “presence of shale
confirmed in field geological surveys and hydrocarbon pro- gas” should not be deemed as an indicator for success of shale
specting, and a lot of research results in relation to black gas exploration.
graptolite shale and source rocks were accumulated [24,25]. The practices of marine shale gas exploitation in South
According to the drilling results in the “12th Five-Year Plan” China have proved that either good shows, or high gas content,
period, the black hot shale (TOC 2%) in the or “successful ignition” doesn't mean industrial gas flow after
WufengeLongmaxi and Lower Cambrian Niutitang forma- fracturing. By far, many enterprises have carried out hydraulic
tions in the complicated tectonic areas in South China is fracturing tests in the target intervals with high shale gas pa-
characterized by great thickness, high organic abundance, high rameters and good gas presence (Table 2), but haven't obtained
evolution degree, and good reservoir physical properties, industrial shale gas flow from either vertical wells or hori-
brittleness and gas-bearing potential. Therefore, these areas zontal wells. The drilling of Well Wuxi 2 in the Dabashan arc
have good shale gas exploitation conditions and prospects fold thrust zone shows that hot black shale with TOC > 2% is
[26e28]. nearly 90 m thick, including 51 m shale with TOC > 3%, and
Undoubtedly, some blocks are even comparable to the 59 m shale with gas content > 2 m3/t, and the highest gas
producing shale gas demonstration zones in the Sichuan Basin content exceeds 8 m3/t [30]. Moreover, water boiling is
(e.g. Jiaoshiba in Fuling, Changning and Weiyuan) in terms of observed after the core is soaked in water, and the gas-bearing
static geologic indexes, especially the high-quality Niutitang/ potential is even better than that in the developed blocks
Shuijingtuo shale which has remarkable thickness and organic (Table 1). However, the exploration wells deployed near Well
abundance (Table 1). However, rich shale doesn't mean rich Wuxi 2 by oil companies in recent years suffered geological
shale gas. Numerous drilling results in the Youyang, Xiushan, complexities during drilling and failed to obtain any com-
Baojing, Fenggang and Zheng'an blocks show that the gas in mercial discovery after horizontal well fracturing. In Well
the Niutitang hot shale is not methane but nitrogen. In the Qianye 1 drilled earlier near the Qianjiang block, “successful
drilled blocks, the nitrogen content of almost 70% of Lower ignition” after fracturing was realized, but many wells drilled
Cambrian black shale is more than 90%. Because of the in this block and the adjacent Youyang block showed “outcrop
complicated tectonic conditions in South China, gas presence failure”. The Niutitang shale buried at 3900 m in this block
in black shale is complicated. For example, Well Tianxing 1 in shows poor gas bearing, and a dominance of nitrogen (more
the Cengong block revealed a low-yield gas flow (with than 84%); the first horizontal well drilled with 3D seismic
methane content ranging from 76% to 81%) through liquid data only produced trace gas after 16-stage sand fracturing and
nitrogen drainage and swabbing after vertical well fracturing micro-seismic monitoring. In the Chengkou block, also in the
in the Niutitang formation, while Well Tianma 1 about several Dabashan complex tectonic zone, many exploration wells
kilometers away demonstrated a dominance of nitrogen (more show that the Lower Cambrian Shuijingtuo black shale has
than 95%) in the Niutitang formation. Furthermore, in some reservoir quality superior to all other blocks (Table 1); espe-
wells in Zhantong and Changning blocks, the Niutitang black cially, its TOC is up to 30%, and its gas content occupies a
shale has a low gas content (<0.5 m3/t) although it has a large leading position in the complex tectonic areas. Moreover,
thickness (40e50 m) and high organic content (TOC > 3% on methane content is very high (more than 94%) in the
average); the gas is mainly nitrogen, and no gas flows out after Chengkou block, which is different from the Niutitang shale in
fracturing. other blocks where nitrogen content is high. However, there
Table 1
Characteristics of hot shale in marine shale gas blocks in South China.a
Block Target Thickness/m TOC Porosity Gas content/m3 t1 Quartz content
Max Avg Range Avg Range Avg Range Avg
LaifengeXianfeng WufengeLongmaxi 18e21 4.2% e 2.9e4.0% 3.4% 0.2e3.7 1.7 15.9e66.0% 39%
Baojing 8e13 4.3% 2.7% 0.5e2.8% 1.5% 0.2e4.5 2.2 55e67%b 62.5%
Baojing Niutitang 58 15.0% 7.9% e 0.6% 0.1e0.7 0.4 e 81.8%
Xiangxi Huayuan 35 4.0% e 0.2e2.6% 1.2% 0.8e2.4 e 30e56% e
Cengong 43e51 10.9% 4.7% 0.02e4.1% e 1.0e2.8 1.7 31e62% e
Fenggang 70e108 6.7% 6.7% 0.2e3.0% 1.1% 0.04e4.1 2.1 55e100%b 78%
Chengkou Shuijingtuo 40e100 30.0% 4.6% 1.0e7.0% 4.4% 1.8e8.6 4.2 24e76% 43%
ChangningeWeiyuan WufengeLongmaxi 33e50 7.3% 2.7%/4.0%c 3.4e8.2% 5.3%/5.4%c 1.7e6.5 2.9/4.1c 16.7e67.6% 33.1%/41.1%c
Fuling Jiaoshiba 38e44 6.1% 3.5% 5.0e7.8% 6.2% 4.0e7.7 6.1 31.1e56.0% 41.9%
a
This table is compiled with references [26e29] and other data.
b
Quartz þ feldspar content.
c
Changning/Weiyuan.
Fig. 4. Pattern of hydrocarbon generation, expulsion and evolution and formation of shale oil/gas (according to the technical communication with Conoco Phillips,
2013).
was no exploration breakthrough in two wells with 7 hydraulic decline in a short period of time. Therefore, there is a great
fracturing stages completed by the domestic and international uncertainty and exploration risk if the shale gas resource
oilfield service companies, and Well Chengtan 1 obtained prospect is evaluated or the favorable area is delineated in
nothing even after liquid nitrogen gas lifting and swabbing these areas in South China only by geologic parameters of
were conducted during the flowback (Table 2). Anyway, the shale, especially site desorption gas or gas content
Chengkou block is incorporated as a key shale gas project in [26e28,30,31], whether the testing methods themselves are
the “13th Five-Year Plan” of a city, and the construction of defective or not. As a result of multistage tectonic movements,
ChengkoueKaixian shale gas pipeline with a length of about these blocks suffered extensive deformation, leading to well-
10 km and an annual gas transmission capacity of about developed folding faults and poor shale gas conservation
2 108 m3 is planning [31]. conditions, and excellent conducting conditions allowed the
The shale gas exploitation practices in the “12th Five-Year escape of most residual free gas in the shale. Thus the scale of
Plan” period also showed that the Lower Paleozoic marine hot resources in these blocks is small and the development po-
shale in the complex tectonic areas in South China generally tential is not large [9].
“contains gas which can't be produced through fracturing or
can't be produced industrially”, as demonstrated by many 3.2.3. Complex tectonic areas meaning no favorable areas
examples. Even inside the petroliferous basin, some horizontal for shale gas exploitation
shale gas wells could not be put into normal production since As is known, although shale gas is generated, preserved and
they failed to meet the commercial production criteria, continuously accumulated in the same set of formations, it still
although they revealed shale gas flow with the flame height up follows the basic rule of oil/gas accumulation, namely, except
to several meters during the fracturing test, and some pro- for the migration and trap conditions, all source rocks, reser-
ducing wells had to suspend due to the sharp production voir rocks, caprock and preservation conditions should be
Table 2
Shale gas content and hydraulic fracturing test results in the complex tectonic areas in South China.
Block Formation Target interval Shale core Results of hydraulic fracturing test
depth/m gas content/(m3 t1)
Max Avg
LaifengeXianfeng WufengeLongmaxi 900e950 3.73 1.72 Through fracturing and micro-seismic monitoring, Well Laiye 1
produced no gas flow after well killing for five days
Nanchuan 4370e4410 4.38 e Through 14-stage fracturing, Well Nanye 1HF produced low-
yield and non-industrial gas flow
Qianjiang 2580e2620 4.43 1.20e2.10 Through 16-stage fracturing and micro-seismic monitoring as
well as liquid nitrogen drainage and swabbing, Well Zhaiye
1HF produced only trace gas flow
Baojing 2700e2770 4.51 2.21 Through fracturing, Well Baoye 1 produced gas 500e1600 m3/
d, non-industrial
Longshan 1890e1920 2.04 1.07 Through fracturing and micro-seismic monitoring as well as
liquid nitrogen drainage and swabbing, Well Longcan 2
produced gas of about 1000 m3/d, non-industrial
Fenggang Niutitang 2645e2720 4.13 2.07 Through 2-stage fracturing, Well Yongfeng 1 produced no gas
flow
Cengong 1760e1820 2.77 1.70 Through fracturing as well as liquid nitrogen drainage and
swabbing, Well Tianxing 1 produced only low-yield gas flow,
non-industrial
Chengkou Shuijingtuo 1600e2600 8.60 4.20 Through 5-stage fracturing as well as liquid nitrogen drainage
and swabbing, vertical well Chengtan 1 revealed flame of 0.2
e0.6 m high in intermittent ignition
available. Research shows that the Lower Paleozoic marine collision and extrusion during the IndosinianeYanshan move-
shale in South China has suffered intense reformation due to ment, the JiangnaneXuefeng basement detaching belt was
multistage tectonic movements from Caledonian to Himalayan formed in the southeast of Yangtz plate and override from the
since it was mature enough to generate hydrocarbons. Obvi- southeast to northwest, leading to the progressive deformation
ously, neither conventional gas reservoir nor unconventional from early to late, from deep to shallow and from strong to
shale gas reservoir could be well preserved in such a long weak (Fig. 5). Therefore, from the JiangnaneXuefeng uplift
history of evolution if there were no good sealing and rela- front to the Qiyueshan at the eastern margin of Sichuan Basin,
tively stable tectonic environments. This has been demon- the areas in the whole Wulingshan, western HunaneHubei and
strated by the exploration of marine oil and gas in South China southeastern Chongqing are attributed to the intensive-strong
since the mid-20th century. deforming belt of constant extrusion and multistage superim-
The development potential of shale gas resources mainly position. In these complex tectonic areas with trough fold
depends on the endowment of resource in hot shale formations deformation, the anticline is gentle, but the Lower Paleozoic
integrating source rocks, reservoir rocks and caprocks, while shale has been outcropped or has suffered erosion, and at the
the hot shale formations are directly influenced by the hydro- core a horizontal (oblique) fault exists. Therefore, shale gas
carbon generation & expulsion pattern and conducting condi- drilling has to be deployed in the narrow syncline area. How-
tions of the shale [32]. When a faulting system is available, the ever, the trough syncline is narrow and close due to strong
excellent conducting conditions allow the expulsion of a large deformation, and the core formation varies greatly and de-
quantity of oil/gas, leaving less residual shale gas resources that velops multistage longitudinal deep large faults [35], resulting
can be exploited. Thus shale gas potential distinctively drops. in the infiltration of surface water and pressure seal system
On this basis, EIA's first report on world shale gas resources damage, thus the shale gas sealing condition is unquestionably
[33] classified the complicated tectonic areas such as deep large poor. Although there is some residual shale gas in the un-
faults and thrust fault blocks as high risk areas of shale gas damaged syncline area (such as Sangtuoping syncline in the
exploitation. That is also a critical reason that there is no southeastern Chongqing, and Anchang syncline in the northern
commercial progress of marine shale gas exploration in the Guizhou [23]), shale gas resources are definitely limited,
complex tectonic areas in South China regardless of investment bringing about great economic risks for shale gas exploitation.
with several billions of CNY (although the authors have Exploration practices show that multistage multi-cycle struc-
pointed out high risk of exploitation in these blocks and the tural extrusion resulted in shale gas escape, decompression and
resulting waste of social resource [9]). This occurs in not only sealing problems, which becomes a key factor restraining
the licenses in the first and second rounds of bidding, but also a marine shale gas exploitation in the complex tectonic areas in
batch of shale gas wells deployed by some oil companies and South China.
GSC in the complex tectonic areas in South China. Drilling results in the complex tectonic areas in South
Ding and Liu [34] made a series of researches on the tec- China show that shale cores are generally broken due to the
tonics in South China and revealed that due to the giant well-developed fault system, and the hot shale thickness
Fig. 5. Section of progressive deformation structure inside the Yangtz plate (HuayingshaneLoudi) (note: slightly simplified according to Ref. [34]).
(10e20 m) and average gas content (1e2 m3/t) in some 3.3.1. Effective exploitation coverage
blocks, especially near the Xuefeng uplift front, are generally In the delineated 1000e2000 km2 exploitation blocks for
lower than those in the blocks inside the basin (Table 1), where bidding, there are huge ineffective areas, such as shale for-
the shale gas resources even cannot reach the standard of mation erosion or outcrop areas, natural reserve areas (e.g. the
favorable blocks [32]. In addition, because of strong fold 440 km2 Jinfo Mountain World Natural Heritage Reserve in
deformation and severe fault cutting as well as target forma- Chongqing Nanchuan block, which accounts for about 20% of
tion well conserved in the narrow steep synclinal valley, a lot the block coverage), forbidden area and townships, even
of engineering problems and high cost occurred during drilling massive volcanic rock areas (e.g. Zhejiang Lin'an block). Thus
and completion of wells in the complex tectonic areas. In the the actual effective exploitation coverage is small, and in some
shallow Permian and Triassic of the blocks carbonate karst blocks such as Chengkou, it is less than 50% of the total
caves and underground rivers develop, which causes heavy coverage.
mud loss during drilling. For example, in the Qianjiang block, Obviously, it is very difficult to finish the investment and
two wells suffered mud loss of ten thousand cubic meters; obligations under the bid, although the blocks are classified as
although an advanced rotary steering system was adopted favorable areas with rich shale gas resources. As was reported,
during horizontal well drilling, due to geological complexities about RMB12.8 billion was required for 19 shale gas blocks in
(for example, frequent encountering of fault and great varia- the second round of bidding in the three-year exploration
tion of dip angle made it impossible to maintain the target period. However, after the exploration period, all the shale gas
location), the drilling of 1000 m horizontal interval was finally operators had to face the predicament of “drawing water with
finished in about half a year with the support of 3D seismic a sieve”, namely, they could not accomplish the committed
data. Furthermore, the fracturing results of horizontal shale gas investment and obligations due to limited favorable areas for
wells are often poor in the fault areas, because even a small exploitation, poor drilling and fracturing effect, difficult se-
fault can transfer or drain the huge fracturing energy. The lection of drilling target, and difficult and expensive drilling,
more the faults are, the more the potential leaking belts are, especially in the Qianjiang block where RMB1.7 billion was
and the poorer the fracturing effect is [36]. Therefore, except needed for exploitation. If the penalty is imposed as the first
for shale gas resource conditions, engineering problems in round of bidding, these enterprises will suffer a miserable
drilling and completion are another reason for the poor effect destiny.
of shale gas exploitation in the complex tectonic areas.
3.3.2. Drilling difficulties caused by ground and
3.3. Problems and challenges in shale gas exploitation underground conditions
in complex tectonic areas The complex tectonic areas in South China mostly belong
to fold mountains with ravines and gullies, where karsts and
The above analysis shows that both potential and com- complex fault structures are developed, and formations are
mercial value of shale gas in the complex tectonic areas in steep and even inversed, bringing great challenges to shale gas
South China are very limited in terms of geological conditions, well drilling and completion [9]. The geographic and
or resource endowment, or engineering conditions. So, these geomorphic conditions are very poor with alternate high
areas should not to be regarded as favorable shale gas explo- mountains and deep valleys, thus the burial depth of target
ration areas for large-scale bidding. This explains why there is formations can be zero to 4000 m or deeper. It is difficult to
no commercial discovery and shale gas production up to now select proper sites for drilling and exploration, let alone the
in the complex tectonic areas in South China as in the Sichuan subsequent deployment of “factory” platform wells.
Basin. Additionally, shale gas exploitation in the complex Due to strong deformation and faulting development, there
tectonic areas also faces the following technical and non- are dense deep great faults cutting upward the surface (such as
technical challenges. more than 20 reverse faults of different structure stages in the
3rd block of Fenggang in Guizhou), causing difficulties in the The related data show that Pengshui was the only block with
seismic horizon tracing and structural interpretation. Hence shale gas production in the complex tectonic areas in South
drilling results are dramatically different from the drilling China during the “12th Five-Year Plan” period. Shale gas
design, and sometimes some wells must be abandoned since exploitation in Pengshui block started earlier than the Jiaoshiba
they have not reached the target formations because of com- bock. However, due to its location in the complex tectonic
plex geology. Due to narrow and steep syncline with dip an- areas of southeastern Chongqing, four low-yield wells
gles being more than 60 at two flanks, lateral tracing is very commissioned successively in the Sangtuoping syncline
difficult in a range of more than 100 m (such as Chengkou (testing production of 1.0 104e3.5 104 m3/d) only realized
block), and deployment and drilling should be adjusted at any an annual production of several million cubic meters. It is
time, resulting in great pressure on the HSE management. In concluded that the exploitation scale in the block is very
some blocks, 3D seismic survey has to be implemented ahead limited and the economic value is not worth mentioning. Ac-
of schedule to ensure that horizontal well drilling under the cording to the shale gas industry development plan [31], the
circumstances of no gas discovery, thus both exploration cost annual shale gas production in this block will amount to
and risk increase. Even so, drilling still fails to get the ex- 15 108 m3 at the end of the “13th Five-Year Plan” period. It
pected results. is undoubtedly a very heavy task.
According to other reports, some companies obtained
3.3.3. Basic prospecting conditions “four-story” natural gas and shale gas breakthroughs in the
Generally, although a lot of ground geologic survey and oil/ Qixia, Shiniulan, WufengeLongmaxi and Baota formations in
gas prospecting have been completed, some complex tectonic Well Anye 1 in northern Guizhou, which were appraised as
areas in South China are less explored or even not explored. In “historical, milestone and innovative” achievements, or even
these areas, there are inadequate basic data such as drilling, as “making the sixty-year petroleum dream of China's geolo-
seismic, logging and core analysis, or no matching in- gists and Guizhou people come true” [23]. In fact, among the
frastructures such as pipeline networks. Lower Paleozoic oil assemblies with multiple series of layers
The delineation of favorable areas and selection of bidding in the Sichuan Basin, some wells revealed Baota limestone gas
blocks mainly depend on ground geologic data and the esti- in such structures as Dongshan and Hewanchang from the
mation of shale gas resources [22], but the underground ge- 1970s to the 1980s. For example, in Well Dongshen 1 an open
ology of the bidding blocks is basically unknown, and there is flow of 96 104 m3/d was realized without any stimulation
a lack of share mechanism of exploration data. Shale gas measures, and many wells in the southern basin generally
exploration in these blocks starts from the scratch, suggesting showed gas invasion, gas kicking and blowout in the Shiniulan
that it is a time and expense consuming task. This problem is and Hanjiadian limestone, sandstone and mud shale. In
extremely prominent for those newly established shale gas Chishui of Guizhou, wells on the Taihechang, Wanglongchang
companies. and Guandu structures have produced Permian and Triassic
natural gas and Jurassic oil, and also many wells in the Shi-
3.3.4. Scale of shale gas exploitation niulan and Hanjiadian on the Taihechang structure have
Exploitation practices over three years show that Type I and revealed good shows. For example, Well Tai 13 experienced
II favorable areas generally account for 10e30% of the total strong blowout in four intervals of bioclastic limestone and
block coverage, and these deemed favorable areas for which siltstone from 3054.5 m to 3300.0 m; the tested production
further work is required are delineated to retain the license. was (6e10) 104 m3/d in one interval, and the open flow was
Therefore, most of them are of no shale gas exploration value, (3e5) 104 m3/d in two intervals, with the formation pressure
nor of commercial development value, having not (recover- of 52e66 MPa and pressure coefficient of 1.65e2.06. How-
able) shale gas resources. Even though certain discoveries can ever, carbonate and sandstone gas belongs to fractured gas
be made through further exploration, the scale of shale gas reservoirs with small development scale. For example, from
exploitation is uncertain. In such a situation, commercial 1971 to 1989, there were 15 gas wells producing Permian and
exploitation cannot be realized, which makes it difficult for Triassic gas in the Taihechang and Wanglongchang gas fields
those enterprises to survive due to a giant investment in shale in Chishui area, but the cumulative production was only
gas exploitation. 6.93 108 m3 [37]. In contrast, among the four oil assemblies
The shale gas exploration wells in the complex tectonic discovered in the Anchang syncline in northern Guizhou, the
areas in South China are basically deployed in the syncline of Shiniulan and Baota carbonate rock gas seems to have the
trough structure zones. This is a helpless choice because the features of fractured reservoirs, whose developing prospect
target shale formation on the anticline is mostly outcropped or should be confirmed by further commitments such as appraisal
shallowly buried (where geologic data wells are mostly well drilling and gas well production testing. Although the site
deployed). The shale is well-preserved in the syncline, but desorption gas content of Longmaxi shale is high (up to
strong deformation and limited distribution determine the small 6.49 m3/t), no fracturing test has been conducted, thus
range for shale gas exploration, and the WufengeLongmaxi exploration is limited in the Anchang syncline with a coverage
shale exploration is limited to the surface Permian and Triassic of only 100 km2. Moreover, the favorable area of anomaly
carbonate rock areas. This is an objective cause for favorable pressure by seismic prediction is only 15.7 km2 [23], so the
exploration areas occupying less than half of the total coverage. resource scale is clear.
It was reported that the Ministry of Finance has invested production decline in three years generally existed in North
RMB800 million since 2014 in deploying more than 50 wells America, and the new wells to be drilled cannot copy the bril-
in the complex tectonic areas in South China, and now the liance of old high production wells in the prospective area.
“public welfare” shale gas drilling is being carried out in the Under the limited shale gas block coverage, the blocks for phase
western Hubei and Wulingshan. The authors propose that II development of Fuling present deeper shale gas formations
finance should be focused on one shale gas block with weak (3000e4000 m), more complex structures, higher development
structure deformation and good conservation conditions under cost, more difficulties and risks than those for Phase I.
the direction of “three-in-one” shale gas accumulation theory Comparison of the evaluation results of marine, continental
in China [23], rather than shale gas drilling in a wide range. In and marineecontinental transitional shale gas shows that
this way, shale gas exploitation in the complex tectonic areas marine shale areas are the most prospective. Except for
in South China can be led practically during the “13th Five- WufengeLongmaxi, the marine hot shale in other formations
Year Plan” period and the goal of shale gas production should also be paid attention to, especially the MiddleeLower
under the “13th Five-Year Plan” can be realized. Ordovician Meitan/Dawan and Miaopo graptolite black shales
that were deposited under the similar environment to
4. Some concerns for the future shale gas development in WufengeLongmaxi and the Upper Permian Dalong black sili-
China ceous shale. In addition, the wide-spread Qiongzhusi/Niutitang
hot shale in the basin has been proved to be a set of industrial gas
Chinese President Xi Jinping pointed out in 2016 that “a zone, but it is difficult to be developed due to its great burial
problem can initiate and trigger an innovation”. In order to depth and complicated geologic conditions.
make the “13th Five-Year Plan” and future plans meet the
reality, it is required to summarize the available achievements 4.2. Exploitation of deep shale gas
and favorable conditions and also think about the problems of
and adverse impacts on the development. Through shale gas research and tests in the “12th Five-Year
Plan” period, exploitation technology for shale gas below
4.1. Replacement of shale gas producing areas 3500 m has been basically matured in China, but horizontal
well fracturing technology and facilities for this kind of shale
As mentioned above, the major factors restricting the future gas have not progressed remarkably [1,5]. In Weiyuan, Fuling,
shale gas development are not policies or government supports and FushuneYongchuan blocks, the production performance
but domestic shale gas resources, exploitation technologies of deep shale gas is obviously worse than that of shallow gas.
and cost. According to the successful “shale gas revolution” in For example, in FushuneYongchuan block, where the
the USA, a great increase of shale gas production depends on WufengeLongmaxi shale is generally buried below 3500 m,
the discovery of new measures, new blocks and new gas plays. the first vertical well and first horizontal well realized the
From the earliest discovered five shale gas plays such as Ohio highest production of 6 104 m3/d and 43 104 m3/
to the current nine producing shale gas plays including Mar- d respectively during fracturing test, but the ten wells drilled
cellus (annual production of 30 108e1500 108 m3 for later could not copy the success of the first wells. The shale
each play, and the pay zones ranging from Ordovician to gas resources in this block approximate that in the Chang-
Cretaceous, as shown in Fig. 2), shale gas production in the ningeWeiyuan demonstration zone [6], but the deep ultra-high
USA has increased sharply from less than 100 108 m3 at the pressure conditions result in difficult exploitation, high cost
end of 20th century to nearly 4000 108 m3 now. According and testing problems and cause the production to halt at
to the particular production decline rule of shale gas, it is 2 108 m3 in four years of the first shale gas PSC block in
difficult to maintain the current shale gas production in China China, and the development result is far less than the expec-
if there are no new measures and new blocks, and in the future tation of the operator. Dingshan, Nanchuan and other blocks
the upper-stage yield target is hard to realize. also encounter the challenge of deep ultra-pressure engineer-
There are more than 20 sets of hot shale in three types (ma- ing technology and fracturing stimulation facilities, where the
rine, continental and marineecontinental transitional facies) in development potential also depends on the breakthrough of
China [6], but only the WufengeLongmaxi shale gas of marine deep shale gas developing technology.
facies in the Sichuan Basin is commercialized after the large- Domestic shale gas resource evaluation results show that the
scale exploration during the “12th Five-Year Plan” period. In deep shale gas resources buried below 3500 m account for more
the “13th Five-Year Plan”, the “key shale gas capacity building than 65% of the total [5]. In the southern Sichuan Basin, the
areas” are only limited in the WufengeLongmaxi in the Sichuan favorable coverage of Qiongzhusi and WufengeLongmaxi
Basin. Within these areas, the range of proved shale gas plays is shale gas buried below 3500 m accounts for 94% and 82% of the
limited (such as Fuling Jiaoshiba, 383.54 km2; Chang- total area respectively. If effective technology for deep shale gas
ningeWeiyuan, 207.87 km2). Thus the “13th Five-Year Plan” exploitation is developed, the E&D domain of shale gas will be
has to focus on the deep formations with complex structures to expanded greatly, and the production of shale gas within the
realize production increase. Even the high-quality shale basin will grow substantially, bringing about a good production
gas fields such as Fuling (proved reserves abundance: replacement sequence. This is a key and hope for the shale gas
9.92 108 m3/km2) will comply with the rule of rapid production increase during the “13th Five-Year Plan” period.
4.3. Prospect of non-marine shale gas resources in order to make a realistic evaluation on the prospect of non-
marine shale gas.
There is no breakthrough in five-year exploration of con-
tinental and marineecontinental transitional shale gas which 4.4. Prospect of Lower Paleozoic shale gas resource in
was highly expected and forged as the China-characteristic South China
resource. The evaluation results of exploration in the “12th
Five-Year Plan” period show that from the prospective of shale In the E&D practices in the “12th Five-Year Plan” period,
reservoir quality (RQ) or completion quality (CQ), non-marine breakthroughs were made in only marine shale gas in the
shale gas resources are inferior to marine shale gas (Table 6 in Sichuan Basin. In the “13th Five-Year Plan”, the favorable
Ref. [6]). This causes the poor development effect in the production blocks are confined mainly to marine shale gas
mentioned two types of shale gas. In the first ChinaeUS areas in South China [1], based on a shale gas resource eval-
cooperation shale gas project in 2012, USGS provided a uation result. According to the latest evaluation result (2015)
lower-than-expected evaluation on the marineecontinental of the Ministry of Land and Resources, the recoverable re-
transitional shale gas resources in the east sag of Liaohe, and sources of Lower Silurian and Lower Cambrian marine shale
EIA (2013) and CNPC Research Institute of Petroleum gas reservoirs in South China account for 87% of the total in
Exploration and Development (CNPC RIPED) also got a not- China, while the Sichuan Basin and the complex tectonic areas
optimistic result of recoverable continental shale gas resources in South China share 39% and 61% respectively in two sets of
(Fig. 6). This has been proved by the exploration in the “12th shale gas reservoirs in Lower Paleozoic. Clearly, in view of
Five-Year Plan” period. Specifically, several continental shale only the recoverable shale gas resources, the prospect in the
gas blocks like east Liaohe and ChuanxieLangzhong, which complex tectonic areas in South China seems to be higher than
were incorporated into 19 key E&D blocks in the “12th Five- that in the Sichuan Basin. However, the actual exploration and
Year Plan”, are not found in the “13th Five-Year Plan” [1]. development effect is not the case as mentioned above.
The hydrocarbon generation and expulsion assemblages in As is known, shale gas presents regional continuous wide
lacustrine and coal-measure formations are more favorable for distribution, and the gas play range is always delineated by
oil/gas expulsion and migration [9,32], so a higher oil/gas high GR hot shale distribution, thus the resources are huge (up
expelling efficiency will definitely restrict the exploration to trillion cubic meters). Therefore, the evaluation and pre-
potential of the “inside-source” oil/gas (Fig. 4). On the con- diction of shale gas prospect should focus on “quality” instead
trary, the “outside-source” tight sandstone gas or carbonate gas of “quantity”, namely, on the commercial value of shale gas.
or even coalbed methane in the lacustrine and coal-measure Considering only the shale gas resource evaluation results, if a
formations should be the primary target for unconventional shale area proved to be of no commercial value by numerous
oil/gas exploration. During the “12th Five-Year Plan” period, drilling and fracturing tests is deemed favorable for further
some shale gas discovered in the CarboniferousePermian of exploration and development, it is not only contrary to the
South Huabei Basin and the Ordos Basin as well as the Upper practice rule but causes unnecessary loss to development
Triassic and Jurassic in the Sichuan Basin mostly belongs to enterprises.
tight sandstone gas or carbonate gas [9]. Compared with the From 2009 to 2012, in order to learn the shale gas devel-
evaluation results in 2012, the continental and marine- oping experience from North America, some Chinese oil
econtinental transitional recoverable shale gas resources companies conducted collaborative assessment upon the shale
estimated by the Ministry of Land and Resources (MLR) in gas potential in the peripheral tectonic areas of Sichuan Basin
2015 were about 50% less, but still up to 9 1012 m3 (Fig. 6). with Exxon, Chevron and Shell, but due to poor drilling results
During the “13th Five-Year Plan” period, proper blocks should and small resource potential, these IOCs withdraw from the
be selected for pilot test of shale gas exploitation with blocks one after another. In terms of the shale gas resource
consideration to the unique geology of non-marine shale gas, potential in the complex tectonic areas in South China, current
Fig. 6. Recoverable shale gas resources in China estimated by different organizations.

concerns are neither about the resource quantity nor about the 3) It should be cautious to launch more shale gas blocks for
shale gas existence but about the efficient development of bidding in the future, especially in the complex marine
shale gas in the areas with horizontal well drilling and hy- tectonic areas in South China, where there is no oil
draulic fracturing technologies. Otherwise, no matter how exploration base and facility or the shale gas resource
much the investment is, shale gas production and commercial endowment is low.
return will not be realized. 4) Shale gas production in China will go up a few steps in
the coming five years from less than 50 108 m3 in
4.5. Shale gas exploitation cost 2015 to 300 108 m3 in 2020. The goal can be achieved
under two preconditions. First, the developed shale gas
Under the circumstances of tumbling oil prices in recent blocks can continue their high stable production or make
years, the stable growth of oil/gas production in the USA has up for the decline of old wells by drilling new wells, and
mainly benefited from the low-cost and high-efficiency devel- the new wells are expected to copy the high production
opment of shale oil/gas, and the constant technical progress is of old wells or new stimulation technology is adopted to
the main way to achieve the goal. The effective improvement of further tap the potential of old wells. Second, and the
hydraulic fracturing technique, optimization of well completion most important, a new batch of shale gas replacing
design and application of multi-well platform greatly improve zones/blocks are discovered and put into scale devel-
the drilling efficiency and single well production and greatly opment. These are also a resource basis to maintain the
reduce the shale oil/gas exploitation cost [13]. In recent years, stable development of shale gas in the USA under the
through the progress of platform well producing, the tested tumbling oil prices.
production of gas wells in the ChangningeWeiyuan demon- 5) The deep shale gas resources buried below 3500 account
stration zone has increased by nearly 35%, preliminarily real- for more than 65% of the total in China. In the southern
izing the profitable development of shale gas. Sichuan Basin, where the Lower Paleozoic marine shale
As was reported, the oil breakeven price of the major shale gas resources are the enrichment, the shale gas buried
oil/gas plays in the USA, such as Bakken and Marcellus, can be below 3500 m is dominant. The development of deep
lower to USD30e40/barrel and USD3e4/1000 ft3. At present, shale gas exploitation technology is the key and hope for
the shale gas producing cost of domestic oil companies in four the shale gas production growth in the “13th Five-Year
blocks of Sichuan Basin is higher than that in the USA [5]. Plan” period.
Besides the difficult development and high cost caused by 6) In terms of the future and the prospect of shale gas in-
complicated geology, the development is constrained by shale dustry in China, the issues of risk and scale profit in
gas developing scale and service marketization insufficiency. In shale gas development should be envisaged prudently
terms of domestic shale gas development, scale means profit. and scientifically, and the experience and lessens should
From the view of shale gas development in the Sichuan Basin, be summarized from exploration failures in many blocks
only when production reaches the scale of Jiaoshiba and during the “12th Five-Year Plan” period. Moreover,
Changning shale gas blocks (shale gas buried at about 2500 m), more efforts should be exerted on the geological evalu-
shale gas can be developed profitably. Vigorous cultivation of ation of shale gas and the developing engineering tech-
the third-party service market and increase of multi-channel nologies, the basic procedures of shale gas exploration
supply and service of drilling and facilities are also an effec- and development should be followed, and the realistic
tive way to reduce the shale gas development cost. industry goal should be established rationally. In this
way, a sustained and healthy development of domestic
5. Conclusions shale gas industry can be ultimately realized.
1) Since many problems exist in shale gas development in

the complex tectonic areas in South China, such as great References
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Shale gas exploitation: Status, problems and prospect

1. Introduction period, the cumulative proved marine shale gas reserves in

revolution” in the North America. Although only four countries

Fig. 6. Recoverable shale gas resources in China estimated by different organizations.

1) Since many problems exist in shale gas development in

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