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CPC Corporation, Taiwan (CPC) is the foremost energy enterprise in the Republic of China.

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Global Operations

Home > Global Operations > Upstream Operations

Upstream Operations

Upstream Operations

 
STRATEGIC EXPANSION –EXPLORATION AND M&A PROGRESSING IN TANDEM
 
EXPLORATION AND PRODUCTION
Taiwan has only very limited indigenous energy resources and depends on imports for almost all its fossil fuels. CPC has therefore focused on more effective expansion of its upstream operations by developing its own reserves – ramping-up exploration and production at source abroad – to help stabilize Taiwan’s supply of oil and natural gas and ease the impact on the public of price fluctuations. This has taken place in the context of the government’s policy for strengthening Taiwan’s energy security mechanisms and promoting international cooperation in energy-related matters.
 
In order to improve its overall strategic positioning and stay in alignment with the corporate philosophy of ‘active expansion, focused development’, CPC has adopted exploration strategies aimed at gradually increasing its ratio of self-owned and self-controlled energy reserves within the full sourcing range. Achieving this means, in summary: expanded development of overseas resources while exploiting indigenous resources to their maximum capacity; boosting exploration activity through both M&A and joint-ventures; and the training and retention of talent – an important renewable resource essential to success.
 
TAIWAN’S ONSHORE OIL & GAS: ONGOING DEVELOPMENT
In 2016 CPC completed 2D seismic surveys of the Pingtung Plain – 38 km in the central section as well as 44 km in its northern part. There was also a survey of the Fengshan mud diapirs (structures formed by extrusion) at 261 points by the precise-gravity method, as well as other geological surveys covering 73 sq. km. Production from 33 wells in southern and southwest Taiwan yielded 320 million cubic meters of natural gas and 8,446 kiloliters of condensate and three producing wells were repaired.
 
TAIWAN’S OFFSHORE DEVELOPMENT
CPC is cooperating with Husky Energy of Canada in the exploration of deep-water blocks in the Tainan Basin; this arrangement allows CPC to both acquire deep-water exploration technology and and mitigate its risk. Husky has completed the interpretation of 2D seismic pre-stack depth migration (PSDM) data and plans to conduct 3D seismic surveys in the second quarter of 2017.
 
EXPLORATION IN THE TAIWAN STRAIT AND EAST/SOUTH CHINA SEA
CPC has completed its assessment of both drilling potential and risk in the Taichao contract block and plans to drill in the most promising area. The contract between the parties involved has been extended until 31 December 2018. Additionally, and in line with government policy, CPC has joined forces with National Taiwan University and National Cheng Kung University to serve as joint contractors to the Bureau of Mines, MOEA for the assessment of potential oil and natural gas reserves in the East China Sea and South China Sea.
 
OVERSEAS EXPLORATION AND DEVELOPMENT
As of end-2016, CPC was engaged with international oil companies in joint exploration of 22 fields in 8 countries and was involved in the operation of 1,142 producing wells; the drilling of 6 wells and repair of a further 82 holes was completed during the year. In the same period, CPC obtained just over 4.907 million barrels of crude oil and 230 million cubic meters of natural gas as its share of the output of 13 producing fields in Ecuador, Indonesia, Niger and the USA. This output consisted of both conventional and ‘tight’ oil and gas and employed ultra-low pressure enhanced oil recovery (EOR) methods and similar technologies to obtain those large volumes of high-quality hydrocarbons.
 
SEEKING OPPORTUNITIES FOR COOPERATION OVERSEAS
The likely successive exhaustion of Taiwan’s existing onshore oil and gas fields over the next 10 years constitutes a call for action to avoid a crisis. CPC is therefore continuing to put effort into both domestic and foreign exploration and production and also engaging with suitable merger and acquisition opportunities. One instance of foreign exploration, in Chad, serves as an example: one appraisal well drilled with CPC as the operator has brought in additional contingent reserves of 1.63 million barrels of oil and so the company is currently planning development of that field. As for Niger, 5 exploratory wells have been drilled with oil and gas discovered in 4 of them, bringing additional contingent reserves of 2.25 million barrels of oil. The total in that category now amounts to 3.88 million barrels. CPC continues to seek new fields with potential. An assessment of a number of tender cases carried out in 2016 indicates that solid results can be expected.
 
CONSISTENT AND LOGICAL AGGREGATION OF SELF-OWNED OIL AND GAS ASSETS
CPC’s upstream operations, which were launched in 1959, comprise exploration and production in both onshore and offshore oil and gas fields in Taiwan, the Taiwan Strait and overseas. In the main successful, they have to date yielded oil and gas to the value of over NT$200 billion. Looking to the future, the CPC vision is that of becoming a high asset-value international oil and gas business: it is consistently engaged in upstream international cooperation and M&A activity centered on exploration and boosting its self-controlled oil and gas reserves; and also in seeking opportunities for investment in overseas assets during periods of low oil prices. The company will endeavor to acquire mid-size and small oil and gas fields, above all those with low risk, and to extend contract rights in currently-producing fields.
In parallel with this, there are initiatives to develop diversity in the scope of business and to be a player in green industry.
 
 

                                                          30-08-2017