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Upstream Operations

Exploration and Production

Expand international cooperation to raise the level of energy autonomy

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’s “furthering energy supply security mechanism and forging international energy cooperation” policy. CPC is dedicated to improvement of its performance of new energy development, expansion of upstream operations and increase of oversea production to stabilize the supply of crude oil and natural gas of the domestic market and alleviate the impact brought by oil price fluctuation.

In order to improve overall strategic planning, on the basis of active expansion and focus, CPC has adopted exploration and production strategies which aim for expanding foreign operations and exploiting domestic operation, simultaneous undertaking of merger/acquisition and exploration/production and the training of talent for new breakthroughs, in hope of gradually increasing the ratio of self-owned energy reserves within its full sourcing range.

Exploration of onshore oil and gas resources and capacity of geothermal energy

Currently, the company’s 28 onshore producing oil and gas wells are located in and around Mt. Tiezhen, Qingcao Lake, Jinshui, Chuhuangkeng and Guantian. In 2020, they yielded 105 million cubic meters of natural gas and 2,170 kiloliters of condensate. In 2020, CPC carried on domestic onshore oil and gas resources exploration projects and completed a 115.86 km 2D seismic survey of geological structures on Pingtung Plain and 83-square-kilometer geologic surveys including a surface geology survey running from Chiayi to west of the Pingxi Fault in Tainan and a geothermal geology survey of the Mt. Datun area. In order to support national energy policy and actively participate in development of the green energy industry, CPC has also successfully completed the drilling of Tuchang No. 14 and No.15 geothermal wells and is now evaluating their potential of geothermal power generation.

Cooperation for deep-water exploration and self-reliant exploration and production

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 and completed the data processing as of 2020. The interpretation work will continue in 2021.

CPC has also worked with Husky Energy International Corporation to search for oil and gas in deep-water areas within the Block Deep Water 1 (DW-1) in the Tainan basin and completed joint research on the source rock in 2020. Refinement of seismic interpretation of collaborated source rock study and assessment for resource scale of prospects are ongoing in 2021.

In order to increase the percentage of domestically produced energy and gas and oil resources, CPC is evaluating the upside hydrocarbon potential of Tainan and Taihsi Basins Taiwan as the reference for the further exploration on those areas. It has utilized multiple latest technologies, including broadband seismic survey, pre-stack depth migration and a new model for interpretation of seismic survey results for re-processing of available seismic survey information and subsequent consolidation of interpretation and assessment. CPC has also reviewed several sites with exploration potential and planned related operations like boring with the aim to discover resources in national sea areas as soon as possible.

Continuing progress on foreign exploration projects

In 2020, CPC was engaged in oil and gas exploration and production joint-ventures with international energy companies and operated eight projects in six countries. According to the proportion of royalty interest, 5.0183 million barrels of crude oil, 398 million cubic meters of natural gas and 7.1 thousand barrels of LPG were allocated to CPC. The oil and gas are from the development and operation fields in Ecuador, Niger, Australia, and Chad.

CPC has continuously moved toward the goal of increasing domestic sources and stability of energy supply. Its important achievements in this regard include committing to Niger development plan with the aim of exporting its crude oil as soon as possible. The Ichthys project in Australian launched the phase 2 development plan in 2020 and continually keep the stable production, which has bright prospects. The Chad field, which CPC is the operator of certain blocks since 2006, entered into production in February 2020. The first cargo of oil produced from Oryx concession arrived in Taiwan at the end of November 2020.

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 America (including California, Paraguay and the Gulf of Mexico), 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 gradually increasing cooperation on unconventional resources with other countries. 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 will develop diversity in the company’s scope of business and to be a player in the green energy industries, aiming to be a very valuable international oil and gas exploration production business.