China's Sinopec has secured exploration rights for nine hydrocarbon and coalbed methane (CBM) blocks, covering approximately 2,336 square kilometres in Inner Mongolia and Henan provinces. This acquisition is a significant step towards the company's broader goal of bidding for up to 478,000 square kilometres of unlicensed oil and gas acreage in the country.

Block Details and Strategic Impact

Sinopec Zhongyuan Oilfield Company secured the rights with a total bid of 58.87 million yuan (about US$8.47 million). The awards comprise five oil and gas blocks in Inner Mongolia and four CBM blocks in Henan. Securing these blocks at the start of China's 15th Five-Year Plan provides a strategic development advantage, accelerating Sinopec's drive to become a top-tier oil and gas company targeting annual production of around 10 million tonnes of oil equivalent. The new blocks increase Sinopec Zhongyuan Oilfield's total exploration acreage by 14.3%.

Geographical Breakdown

The five Inner Mongolia blocks, covering 1,381 square kilometres, are located in two basins:

• In the Yin’e basin: Alxa Right Banner South and Manghanchaoke blocks.
• In the Erlian basin: Zhenglan Banner, Xilinhot and Naomugen Sag West blocks.

A sixth block offered in October was awarded to a different company, Inner Mongolia Geology & Mineral Resources Group Company Ltd.

The four CBM blocks in Henan, covering about 956 square kilometres in Puyang city, are:

• Fan County East-Taiqian West
• Nanle East-Qingfeng East
• Nanle West-Qingfeng West
• Taiqian East

These awards significantly support the parent company's "gas-for-oil" strategy by leveraging unconventional reserves to broaden development prospects in the mature Dongpu production area.

Contract Terms

All nine exploration blocks have been awarded to Sinopec under an initial five-year term, commencing from the effective date of the exploration rights certificate. The company has declined to provide further details beyond its official statement.