Go TO Content
Upstream Operations

Upstream Operations


Widening the scope of joint-ventures to boost ownership of energy sources


Taiwan has only very limited indigenous energy resources and depends on imports for almost all of its fossil fuel needs. CPC has therefore focused on achieving effective expansion of its upstream operations by acquiring and developing its own reserves overseas – and ramping up production there – so as to stabilize the supply of crude oil  and natural gas (imported as LNG) into the domestic market and thus ease the impact on the public of global price fluctuations. This development has taken place in the context both of the government’s policy for strengthening Taiwan’s energy security mechanisms and of the company’s greater participation in cross-border cooperation on energy-related matters.

In order to improve its overall strategic positioning and stay in alignment with the key corporate philosophy of ‘active expansion, focused development’, CPC has adopted exploration and production strategies aimed at gradually increasing the ratio of self-owned and therefore self-controlled energy reserves within its full sourcing range. Achieving this means, in summary: expanding the development of overseas resources while exploiting the indigenous ones to their maximum capacity; widening the scope and quickening the pace of exploration activity through both M&A and joint-ventures; and the training and retention of talent – an important renewable resource, and one essential to success.

Developing Taiwan’s onshore energy resources

Through 2018, CPC made progress in realizing the potential of Taiwan’s indigenous energy resources. A 137.54-kilometer 2D seismic survey of potentially hydrocarbon-bearing geological structures on the eastern edge of the Pingtung Plain was completed; the geothermal characteristics of a 72 sq. km  block running from Chiayi to west of the Pingxi fault in Tainan were verified, as were they also around Renze in Yilan County and in the Mt. Datun area.  All told, the company’s 30 currently-producing oil and gas wells – located in and around Mt. Tiezhen, Qingcao Lake, Jinshui, Chuhuangkeng and Guantian yielded 198 million cubic meters of natural gas and 4,678 kiloliters of condensate in 2018. In line with national energy policy and incidentally burnishing its green energy industry credentials, CPC began drilling the Renze No. 3 geothermal well in November 2018.

Deep-water exploration in the Taiwan Strait moves to new areas

A post-operational review and overall assessment of the oil and gas resources revealed by drilling deep-water well ST18-6-1 in the Taichao contract block were carried out in 2018. After careful consideration it was decided that none of the three exploratory wells covered by this contract had the potential for commercial development, and that continuing the search for oil and gas in commercially viable volumes would require the commitment to an unfeasible extent of both capital investment and skilled manpower. In view of these pessimistic prognostications, it was resolved to not extend the contract beyond its expiration on 31 December 2018 and further to dissolve the Taichao Petroleum Corporation. In another move, CPC has joined forces contractually with the China National Offshore Oil Exploration Corporation (CNOOC) and France’s Total to search for oil and gas in deep-water areas within the Nanhai-Taiyang block, which lies on either side of the Taiwan Strait’s center line. A 2D seismic survey of the western half of that contract block was completed in 2018 and processing and interpretation of the resulting data is now under way.


CPC has completed its drilling program in the Taichao contract block and has decided to abandon the well as electronic logging showed no trace of oil or gas. Any future cooperative strategy for this contractarea will depend on the results of further exploratory drilling.

CPC has also started 2D seismic surveys and data processing after signing a contract with China National Offshore Oil Corporation (CNOOC) and France’s TOTAL for joint exploration in the Taiwan Strait’s deep-water area.

CPC's overseas joint-venture natural gas fields come on stream

As of end-2018, CPC was engaged in oil and gas exploration and development joint-ventures with international oil companies in eight locations spanning five countries. About 220 producing wells across those geographies yielded a CPC production share amounting to 4.201 million barrels of crude oil and 100 million cubic meters of natural gas, with blocks in Ecuador and Niger contributing the lion's share. Moreover, as the Ichthys and Prelude gas fields offshore Australia began production and export in  2018 and with blocks in Chad and Niger set to follow suit sometime soon, the outlook for company's profitability in the near term looks promising. In Chad, where CPC has had a presence in exploration for many years, back in July 2017 the government issued a license to the company for development and production in certain blocks where CPC acts as operator; and that same year saw a 25-year development and production phase begin. Those blocks are the first in which CPC has engaged in oil and gas exploration overseas with the status of operator; not only that, but in that location our teams discovered oil in commercial quantities and embarked on development and production programs.  The company is now moving full speed ahead on bringing those fields into production by the end of 2019 – which, if that deadline is met, will be one more good instance of CPC achieving the twin goals of boosting the number of oil and gas sources under its control and of upgrading the stability of Taiwan's energy supplies.

The fact that Taiwan’s known onshore oil and gas reserves could be exhausted within 10 years from now helps to drive CPC’s continual engagement in overseas exploration and production as well as M&A activity. The company has also reset its overseas exploration strategy in line with both the government’s New Southbound Policy and with trends in the international energy industry – which means being active in joint-ventures and/or acquisitions pertaining to oil and natural gas fields in such places as south-east Asia and the United States and then developing them for commercial production. Exploration for conventional oil and gas is currently focused on fields in California, Abu Dhabi, south-east Asia and central Africa; for unconventional sources, the focus is on acquiring shale oil and gas assets in the United States. In all of the aforementioned activities, the company is working vigorously to deploy its limited resources to best advantage, on core overseas targets that hold out the possibility of discovering oil and gas reserves with development value and that will materially raise its degree of ownership and control over its raw material sources.

CPC’s upstream operations were launched in 1959 and today 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 corporate vision is that of becoming a high asset-value, integrated international oil and gas business; it is now heavily engaged in upstream collaboration with multinational energy companies and M&A activity that is centered on exploration and raising its level of ownership and control over its core oil and gas reserves. The company will endeavor to acquire fields with high production potential, above all those with low risk by industry standards, and to seek long-term contractual rights in its currently-producing locations. In parallel with this, there are initiatives to both develop diversity in the company’s scope of business and to be a player in the fast-growing green energy industry.