Taiwan Today

During the past decade, Taiwan has been the scene of dramatic changes. Its remark­able advances have not only raised the living standard of the people, but put free China into the front rank of developing nations.

In the past few years, Taiwan has achieved an economic growth rate second in the Far East only to Japan.

The progress, however, was not easily achieved. It involved long, hard, unremitting effort.

An example was exploration for oil and natural gas, which was successful only after more than 10 years of sustained endeavor.

Oil was first discovered in Taiwan in 1817 but was produced only in small quanti­ties during the half-century of Japanese oc­cupation which ended in 1945.

A geological survey indicates oil deposits in nearly half of Taiwan. The region covers the island's western plains and the eastern mountain range between Hualien and Taitung. Geologists say there are many young, well-developed tertiary formations and substantial deposits of neogene sediment, consisting mostly of thick mudstone, shale, siltstone, sandstone and alternations of these.

Geologists believe, however, that western Taiwan possesses more oil and natural gas than the eastern mountain range.

The western resources are in an area covering about 1,235,000 acres. About 186 miles long and 30 miles wide, it extends from the northern to the southern tip of the island and embraces almost the entire rice-produc­ing belt of the island.

Sandstone is the most important reservoir rock. Geologists so far have discovered more than 80 oil-potential anticlinal structures on the island.

Before World War II, the Japanese in Taiwan had drilled some 250 wells and put several fields into production. The highest oil production was achieved in 1927, with the output reaching 143,490 barrels. The record production of natural gas was 4,750 million cubic feet in 1940.

After that, however, production of both oil and gas began to decline. By the time Taiwan was restored to China in 1945, most fields were nearing depletion.

The situation prompted the government-owned Chinese Petroleum Corporation (CPC) to conduct an intensive search for oil.

From 1948 to the end of 1962, ignoring scores of shallow holes for formation testing, CPC drilled a total of 50 wells in various re­gions of the island. And some of these wells, like those in Chinshui and Tiehchenshan, proved to be of high commercial value.

Most of the wells, however, produce natural gas and only a very small amount of oil.

The Tiehchenshan field, for example, is the biggest gas producer on the island. Developed only in 1962, this field is also the first discovery made by the CPC geologists, at a new anticline, since the Japanese rule of Taiwan ended.

In addition to the Tiehchanshan producer, the CPC has five Japanese-developed gas fields, namely the Chuhuangkeng field, Chinshui field, Chutung field, Hsinying field and the Chutouchi field.

All of these fields are situated on the western plains.

Located about eight miles southeast of Miaoli county, the Chuhuangkeng field is the earliest Japanese-drilled gas field on the island. Since VJ-Day, the CPC has drilled nine new wells there of which two - Wells No. 106 and 107 - proved to be very good producers with a total daily output of 100,000 cubic meters.

Geologists also found five new gas­ bearing zones there. Each zone, after ex­ploitation, is expected to produce 10,000 M³ to 81,000 M³ of gas daily.

Seven miles to the northeast, also in Miaoli county, is the Chinshui field, one of the most important gas-producing fields, with output second only to that of the Tiehchen­shan field.

Developed in 1914, the Chinshui field covers an area of 2,223 acres. It is about nine miles long and four miles wide. The shallower zones at the northern part of the structure have been producing gas for almost 50 years.

This field has 50 wells in all, but CPC now keeps only eight wells in production.

Chinshui was the first field chosen by CPC for deeper horizon oil prospecting. The endeavors turned out to be very successful.

Before deepening old wells for prospecting, CPC had never drilled a well deeper than 2,600 meters.

Test drilling was made in Well No. 38 in May, 1959. This was an old Japanese-drilled well with a depth of 3,583 meters and could produce less than 10,000 cubic feet of gas daily.

After two months of drilling, as the well was deepened to 4,063 meters, a new formation with a rich gas reservoir was found.

According to CPC geologists, the new formation, about 342 meters thick, has a very rich deposit of oil and gas. It contains, they believe, approximately 6,026,000 kiloliters of crude oil and 903,900,000 cubic feet of gas.

This well now produces 100,000 cubic feet of gas and 65 barrels of crude oil daily.

This discovery heightened the CPC's confidence in deeper horizon oil exploration and encouraged the corporation to drill eight more wells in the vicinity.

Now the total daily production of these wells reaches 600,000 cubic meters (21,180,­000 ft³) of natural gas and 26 kiloliters (164 bbls) of crude oil.

In Hsinchu county, 50 miles south of Taipei, are located another two CPC gas field-the Chutung and Hsinying fields. Developed by the Japanese long before World War II, both the fields now have a very limited output.

The Hsinying field has a total of 26 gas wells, but only nine are producing gas and this in only small quantities.

Three miles northeast of Yuching is the Chutouchi field. It is the only gas-producing field in the southern part of the island. Of the eight wells it possesses, five are in pro­duction.

The CPC's biggest success in gas prospecting in Taiwan, however, came in late 1962 when it discovered a very big gas-bearing reservoir at Tiehchenshan, 30 miles east of Miaoli county.

This was CPC's first discovery of a gas resource in a new structure in the last 15 years.

A wildcat, drilled by CPC explorers for prospecting potential reservoir in the middle and lower miocene formation, the TCS-l well was dug to a depth of 4,241.3 meters, the deepest in Southeast Asia, but gas was found at a depth of 2,800 meters.

The digging of the well was started in June, 1962, and was completed in November of the same year at a total expenditure of more than NT$17,500,000 (US$137,500).

About six miles long and three miles wide, the Tiehchenshan field can produce 130,000 cubic meters of natural gas a day, the biggest producer on the island.

Because of marketing problems, most gas wells on Taiwan are sealed for the time being.

In addition to natural gas, the CPC produces gasoline, aviation fuel, kerosene, diesel oil, asphalt, lubricating oil, solvents, and such petro-chemical products as benzene, toluene and xylene.

The Corporation's Kaohsiung refinery has three topping units with a total capacity of 45,000 barrels per day (BPD). The crude oil is largely imported from Middle East coun­tries such as Kuwait, Iraq and Saudi Arabia.

Natural gas is a very important natural material with high industrial value. In many respects, it is even more valuable and useful than petroleum.

When combustible it consists chiefly of methane with small and variable amounts of ethane, propane, butane, hydrogen, oxides of carbon, nitrogen, and hydrogen sulphide. When composed essentially of hydrocarbons, it is valuable as a fuel. One hundred cubic feet of natural gas is equal to eight to 13 pounds of coal.

In Western countries, natural gas is widely used for household heating. In using gas for this purpose, one obtains a service entirely automatic in character, free of labor, dirt, smoke and ash.

Through condensation and extraction processes, natural gas can also be converted into gasoline, fertilizers and many raw mate­rials for manufacture of petrochemicals.

Natural gas produced in Taiwan has not been extensively employed by the populace, but some of it now is used as fuel by in­dustrial plants and homes.

Taiwan also converts natural gas into carbon black by channel process and compresses it into steel cylinders under a pressure of 110 kg/cm² for fuel to operate trucks.

However, a great portion of natural gas in Taiwan has been used to manufacture fertilizers which are much in demand by local farmers.

As in all subtropical areas with a year-round warm temperature and heavy rainfall, the soil of Taiwan is constantly subject to erosion.

The intensive use of land, sometimes more than three crops a year, contributes to depletion of soil fertility. Hence, heavy employment of fertilizers is necessary.

Taiwan is not self-sustaining in fertilizer production. The deficit has to be imported from Japan and West Germany.

In 1962, the government-owned Taiwan Fertilizer Company produced a total of 453,678 metric tons of fertilizers, including 173,­321 metric tons of urea, 78,605 metric tons of calcium cyanamide, and 143,714 metric tons of calcium superphosphate. The production represented an increase of 73,471 metric tons over 1961.

The increase of fertilizer production, however, still failed to meet the requirements of the island. A total of 290,000 metric tons of chemical fertilizer had to be imported in 1962.

Taiwan does not produce potash ferti­lizer because of lack of raw materials.

Because of the successful exploration of natural gas in Taiwan, the Chinese Petroleum Corporation signed, on August 22, 1961, a contract with the Mobil Chemical Investment Incorporation and the Allied Chemical Corporation of the United States to erect a large, modern urea plant at CPC's No. 52 natural gas well in Chinshui, Miaoli. The total capital required is estimated at US$22.5 million.

The raw material to be used in the plant will be natural gas from the Chinshui field. The new urea plant, which will be equipped with US$1,200,000 worth of electrical facilities, will have an annual capacity of 100,000 metric tons of urea and of 106,000 metric tons of ammonia to be used in the manufac­ture of fertilizer.

The plant will be completed in October this year.

Since Taiwan currently imports a large proportion of the chemical fertilizer it needs, the new plant should make it possible to eliminate this drain on foreign exchange.

In addition, the CPC is planning to set up a pipe line connecting key cities all over the island to supply natural gas for industrial and household use. This program, if realized, will enable the island to make a further stride in its economic development.