Significant natural gas resources have been identified in China's Xinjiang region, leading to the opening of a new exploration block for bidding and the potential for a major new energy base.

Resource Discovery and Exploration

An oil and gas exploration campaign in the Dabancheng district of Urumqi, covering seven blocks including Northern Margin and Yongfeng North and South, has identified a natural gas resource of more than 200 billion cubic metres (Bcm). Preliminary assessments indicate that over 100 Bcm of this resource is located in the Northern Margin block alone. To date, significant exploration work has been conducted, with four wells already drilled on the Northern Margin and another nearing completion. Samples from these wells have been sent for laboratory analysis to evaluate the deep oil and gas resources in the area.

Exploration Rights Bidding Process

The Northern Margin block in the onshore Junggar basin's Chaiwopu Depression is now open for bidding for oil and gas exploration rights. According to a notice from the Ministry of Natural Resources and Xinjiang’s Department of Natural Resources, the initial term for the awarded rights will be five years, commencing from the validity of the exploration rights certificate. The deadline for bid submissions is December 3, with the bid opening scheduled for December 4. The bidding process has specific eligibility criteria, requiring that independent applicants must be registered within China and possess net assets of no less than 300 million yuan (approximately $42.46 million). Joint ventures will not be accepted.

Accelerated Exploration Efforts

Exploration activities in the region have accelerated following the initiation of geological surveying by the Xinjiang Geological Bureau's Urumqi geological team in January 2024. Since then, the local government has drilled a total of 15 exploration wells across the seven blocks, of which 11 have been completed, indicating a rapid and concerted effort to develop the area's resources.

Strategic Importance and Potential

The discovery is considered to have substantial strategic importance. The natural gas resources identified in the Northern Margin's Chaiwopu Depression have the potential to form a new energy resource base for Urumqi and the wider Xinjiang region. This development is expected to strengthen Urumqi's role as a regional energy hub. Given Urumqi's crucial position in connecting China and Central Asia, the discovery is seen as a key asset that will support energy cooperation under China's Silk Road Economic Belt initiative.