PETROL.II(ZHONG YUAN

closed

The Dongpu Oil Project will assist the Government in developing oil production in the southern part of the Wenliu oilfield; exploring and evaluating the potential of the eastern part of the oilfield; and recovering liquefied petroleum gas (LPG) from associated gas. It will include a 3-D seismic survey of the South Wenliu and part of the East Wenliu structures, drilling of production, injection, exploration and appraisal wells, and construction of an LPG plant and ancillary facilities. A very important objective of the project is to introduce modern technology and methods of the petroleum industry in China - a process initiated under the Bank's first petroleum project in Daqing. The project will help optimize oil recovery and production rates through appropriate secondary recovery techniques and improved completion practices. It will also provide modern oilfield equipment, computer and training centers, laboratories and technical assistance (including 416 man-months of expatriate consultant services). The main benefits from the project are production of crude oil, gas and natural gas liquids, highly probably discovery of additional reserves, and transfer of technology that will improve operational practices.