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Upstream Operations

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Expand international cooperation to boost energy independence

Exploration and Production

Taiwan has limited indigenous energy resources; therefore, it depends on import for most of its fossil fuel needs. As a result, CPC has cooperated with the government to implement the policy of “Expanding upstream energy operations by acquiring and forging international energy cooperation”. CPC dedicated to ramp up energy production, expand upstream operations, increase oversea production to stabilize the supply of crude oil and natural gas of the domestic market and alleviates the impact brought by oil price fluctuation.

In order to improve the 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; expanding the scope and quickening the pace of exploration activity through both acquisitions and organic growth; and the training and retention of talent – an essential step 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.


Continuous Development of Geothermal Energy

In 2019, CPC made progress in testing the potential of Taiwan’s indigenous energy resources. A 135.7 km 2D seismic survey of geological structures on the eastern edge of the Pingtung Plain was completed; the geothermal characteristics of a 72 km2 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 28 currently-producing oil and gas wells – located in and around Mt. Tiezhen, Qingcao Lake, Jinshui, Chuhuangkeng and Guantian yielded 167 million cubic meters of natural gas and 3,852 kiloliters of condensate in 2019. In line with national energy policy and actively burnishing its green energy industry credentials, CPC has also successfully completed the Renze No. 3 and No.4 geothermal wells with expected producing enthalpy.


Deep-water exploration in the Taiwan Strait and planning for offshore exploration

CPC, Total E&P Chine (TOTAL), and China National Offshore Oil Corporation (CNOOC) signed the Petroleum Contract of Taiyang Block on May 3, 2017. TOTAL, as the Operator, has conducted over 8,000 km 2D seismic survey data acquisition during 2017-2019, and the ongoing data processing and interpretation jobs will continue into 2020.

CPC has joined forces contractually with Husky Energy International Corporation to search for oil and gas in deep-water areas within the Block Deep Water 1 (DW-1) in Tainan basin. 3D seismic inversion and AVO analysis were completed in 2019. Refinement of seismic interpretation collaborated source rock study and assessment for resource scale of prospects are ongoing through 2020. Meanwhile, CPC is evaluating the upside hydrocarbon potential of Tainan and Taihsi Basins Taiwan as the reference for the further exploration on those areas.


Putting oversea exploration plan into production

In 2019, CPC has been engaged in oil and gas exploration and production joint-ventures with international oil companies in eight locations spanning six countries. About 241 producing wells across these geographies yielded a CPC production share amounting to 4.87 million barrels of crude oil, 404 million cubic meters of natural gas and 58.7 thousand barrels of LPG, with blocks in Ecuador, Niger and Australia. Moreover, Chad and Niger set to follow suit sometime soon, the outlook for upstream operations’ profitability in the near term looks promising.

In Chad, where CPC has been acting as operator in exploration since 2006, the concession for a 25-year development and production of certain discoveries was granted by a presidential decree on July 14, 2017. This is the first time for CPC’s teams to discover oil in commercial quantities and embarked on development and production programs with the status of operator. The drilling of development wells and the installation of production facilities was completed progressively and the first oil production was launched in February 2020. It will be another exemplary performance of CPC for achieving the twin goals of boosting the number of oil and gas sources under its control and upgrading the stability of Taiwan’s energy supplies.

The fact that Taiwan’s onshore oil and gas reserves could be depleted within 10 years from now drives CPC’s continued engagement in overseas exploration and production as well as M&A activities. CPC 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 producing assets in places such as Southeast Asia and the United States and then developing them for commercial production. Exploration for conventional oil and gas is currently focused on North America (including California and offshore Canada), Southeast Asia, Australia and offshore West Africa; for unconventional resources, the focus is on acquiring shale oil and gas assets in the United States, building up relevant technical capabilities and pursuing global unconventional resources opportunities. In all of the aforementioned activities, CPC is working vigorously to deploy its available resources to best advantage, on core overseas target areas that hold out the possibility of discovering oil and gas resources with commercial production value and that will materially raise the degree of self-sufficiency.

CPC’s upstream operations were launched in 1959. Today, it comprises exploration and production in both onshore and offshore oil and gas fields in Taiwan, the Taiwan Strait and overseas. To date, CPC has yielded the value of over NT$200 billion. Looking to the future, CPC actively enhances the asset value of production sites and plans M&A activities that is centered on exploration and raising its level of ownership over core oil and gas reserves. CPC will endeavor to acquire assets with high upside production potential, above all those with low risk by industry standards. In parallel with this, CPC has initiatives to develop diversity in the company’s scope of business and to be a player in the green energy industries, aiming to be the most valuable oil and gas production business.