The Oil Industry in Taiwan

Home , County (Taiwan), Miaoli, Orchid Island, Penghu, Taiwan Province

Chapter 41 The Oil Industry in Taiwan

1 Adopting New Technology, Exploring New Oil and Gas Areas

Taiwan Province lies off the southeastern coast of the Chinese mainland across the Taiwan Strait. The province includes the island of Taiwan itself, the Penghu Islands, Orchid Island, Green Island, Pengjia Islet, Diaoyu Islands, and Chiwei Island. Taiwan is the largest island of the province and China’s largest island, with an area of 35,883 km2. In the central part of Taiwan, Yushan Mountain, at 3,952 m in elevation, is the tallest mountain in the eastern part of our country. Taiwan in the past has been reported to be rich in petroleum, coal, gold, copper and sulfur resources, but in fact, much of the coal, gold, and copper has already been mined out, and its petroleum has never been able to meet local demand. Taiwan has been part of China since antiquity. Taiwan’s oil industry is an important component of the Chinese oil industry. Taiwan’s oil industry is one of the oldest in the history of Chinese petroleum. Petroleum was extracted using modern technology at Chuhuangkeng in Miaoli County from 1877 until the end of the twentieth century. Taiwan’s oil industry is around 140 years old, predating both Yanchang Oilfield (1905) in Shaanxi Province and Yumen Oilfield (1939) in Gansu Province. During the Japanese occupation of Taiwan, the oil industry underwent some development, but after the Japanese surrendered unconditionally in 1945, the Nationalist government took over the oil industry in Taiwan. On June 1, 1946, the Nationalist government’s National Resources Commission established Chinese Petroleum Corporation (CPC) in Shanghai, to oversee a dozen petroleum enterprises such as Ganqing Company (Yumen Oilfield), a few refineries in the northeast, and the Taiwan Oil Exploration Division, Kaohsiung Refinery. At that time, oil production in Taiwan had been depressed for a long time. Due to financial problems, oil exploration could not be carried out. After the Nationalist government took over Taiwan, CPC sent a gravity geological crew to survey. Besides managing and repairing the five wells left behind by the Japanese, only two 1,200 to 1,300 m exploratory wells were drilled, with unsat- isfactory results. In 1949, CPC moved from Shanghai to Taipei, in Taiwan. Under the leader- ship of its Chairman Chin Kai-ying, with the full support of the Nationalist government, oil exploration and oil refining developed and surpassed other industries in Taiwan. In 1953, in an effort to promote the petroleum industry,

Chiang Kai-shek visited the Taiwan Petroleum Exploration Division in Miaoli County, encouraging them to adopt new technologies and explore to find new oil and gas fields. In 1959, after careful reconnaissance and research, they chose Jinshui Structure, rich in natural gas. They dug deeper into the existing Jinshui-38 well. During the Japanese occupation period, this 3,583 m deep well was producing 9,000 m3 of gas and 1.3 m3 of oil daily. After eighty days of hard work, they deepened the well to 4,063 m, drilling through five hydrocarbon zones. When they finished drilling, the well produced 1 million m3 of gas and 10 m3 of oil per day. This was Taiwan’s first deep well. It also held the Taiwan record for the quantity of oil and natural gas produced. The crew received four medals and ten certificates of merit from Chiang Kai-shek. As a result of Jinshui-38’s success in obtaining high-yield oil and gas flow, CPC became more active in oil exploration and discovered a group of new oil and gas fields. In 1978, Taiwan’s oil production reached its zenith, producing 2.5 million m3 of crude oil and 19.6 billion m3 of natural gas.

2 Building Oil Refineries, Actively Seeking Foreign Oil Supplies

During the Japanese occupation period, Taiwan’s Kaohsiung Refinery was a large, modern, world-renowned refinery, but when the Japanese Imperial Army retreated, it was severely damaged. After CPC took over, they worked hard in “the spirit of Laojunmiao” to rebuild and expand the plant out of the rubble to the point that it was again providing high-grade aviation fuel and liquified gas for civilian use. As such it could satisfy much of Taiwan’s domestic oil and gas needs. To stabilize the refinery’s crude oil supply, Kaohsiung’s oil port was also built. Meanwhile, in 1970, in accordance with Chiang Kai-shek’s instruc- tions to “enrich the energy supply, spread out the oil refineries,” construction on a much larger refinery started in Taoyuan. As a result, Taiwan’s petrochemical industry, using oil and gas as raw materials, expanded. Since Taiwan is small, with limited resources, the government has been looking for oil and gas overseas from the beginning. Since 1970, the CPC has been cooperating with foreign oil companies in oil and gas exploration and enjoyed remarkable results.

3 A Key Player in Taiwan’s Economic Success

The oil industry’s development in Taiwan is closely linked to Taiwan’s economic development. To satisfy increasing market demand, Taiwan’s petroleum