In cooperation with China United Coalbed Methane Corporation Ltd. (CUCBM), Texaco China BV (Texaco) is evaluating the Huaibei coal basins in northern Anhui Province for coalbed methane development. Texaco's initial exploration will focus on the Sunan and Nanping synclines where Permian-age coals are known to be within optimum maturity levels. Based on recent test drilling data, gas contents of objective coal seams are also shown to be quite attractive. However, the tectonic history of the Huaibei region presents some concern about the in-situ gas saturation levels in the coals. Even though the region certainly has some challenging technical risks, the initial technical evaluation indicates a promising potential. A multi-well core and test program has been designed to quickly and efficiently evaluate specific reservoir properties prior to critical decisions for pilot testing and full-scale commercial development. Key reservoir properties to be determined include coal thickness, permeability, porosity, gas content and gas saturation levels. Reservoir model studies using a coalbed methane simulator will then be used to examine the productive potential of the area. The variability and sensitivity of these key reservoir parameters in regard to production rates is discussed along with Texaco's exploration and development strategy. The paper also discusses the operational plans and overall strategy of managing risk by utilizing a phased approach.

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