In 2021, at the geothermal well construction site in Lingbao, in western Henan, the drill bit was driven down to a depth of 2,000 meters. Who could have thought that a well meant to find hot water for heating would somehow pierce a subterranean oil reservoir that has been underground for tens of millions of years?

A basin that geology circles had ignored for decades hides 427 million tons of oil. Could it be that both geological accumulation and strategic readjustment have been quietly setting up this double foreshadowing?

An Unplanned Geothermal Well’s Comeback

The original purpose of this well had nothing to do with oil. Private companies drilled only to obtain geothermal resources, supplying hot water for local industrial and agricultural use and for people’s heating. The reason it was overlooked was that, at the time, the Sanmenxia Basin—within the oil and gas exploration community—was basically considered a small, nameless player.

After more than seventy years of searching for oil in North China, China’s focus has been on large basins such as the Songliao Basin and the Bohai Bay. Middle-sized and small basins like Sanmenxia, due to complex geology and low exploration levels, had long been classified as areas with limited potential, to the point of not even being counted as official exploration targets.

When the drill bit brought up traces of oil, most in the industry didn’t take it seriously. After all, in many rounds of earlier probing, they had only found scattered oil traces, and no one believed it could amount to anything substantial. It wasn’t until the oil seepage became more and more obvious, and a stable oil-bearing formation was clearly encountered by drilling, that it truly alerted the Ministry of Natural Resources and the geological departments of Henan.

In 2023, the China Geological Survey deployed verification well Yuxia Di 1 in the Yuxia area. The results exceeded expectations. Initial daily oil production was 56.14 cubic meters; even after stabilization it still reached 27.53 cubic meters, and it was high-quality light oil without any water. In 2024, well Yuling 2 in Yuling proved even more impressive: daily production reached 92.52 cubic meters from a single interval.

After expert demonstration, the basin’s conventional petroleum geological resources total 427 million tons—enough to support a national-level oil and gas follow-on supply base. Behind this figure lies the inevitable result of China’s shift in oil and gas exploration from “scale-first” to “fine extraction of remaining potential,” the product of a synchronized resonance between foundational geological accumulation and strategic direction.

Since 1956, over multiple rounds of surveys and investigations, the Sanmenxia Basin has not achieved breakthroughs in commercial oil flows, but it has mapped thick organic-rich mudstones underground—over 200 meters—rich in organic matter. Its organic matter content reaches a maximum of 5.85%, far above the threshold for oil formation, planting the seeds for later discoveries.

Beyond building the foundation with basic data, more crucial is the underlying adjustment of the national energy strategy. A new round of breakthrough actions in mineral exploration has listed middle-sized and small basins as key targets. In essence, it means breaking away from path dependence on traditional large-basin approaches and solving the “bottleneck of increasing reserves and production.”

Coincidentally, geothermal well technology and oil and gas well technology are mutually transferable. What began as a geothermal well unexpectedly became the opening to break industry barriers. Its core value is not only discovering an oilfield, but also providing a new exploration paradigm of “cross-domain prospecting and multiple-point penetration,” overturning the entrenched notion that “specialized exploration monopolizes the right to find oil.”

A Million-Year Oil Storage Closed Loop

Oil formation is never a simple matter of piling up materials. The oil storage closed loop in the Sanmenxia Basin is a precise coupling of “timing, location, and conditions” within geological evolution—and it also reveals the hidden core rule of how oil and gas accumulate in middle-sized and small basins.

We start with the Eocene, more than 50 million years ago. A tectonic event that changed the regional geological framework laid down the first seed for oil generation. At that time, the basin rapidly subsided due to the activity of north-south fault zones, forming a deep-water lake basin. In the lake, flourishing planktonic organisms such as algae thrived. Add to that a dry climate that caused lake water to become saline, and biological debris kept accumulating in an oxygen-deficient environment.

After tens of millions of years of evolution, a thick layer of dark mudstone—over 200 meters—was formed here. This is the high-quality raw material reserve for oil. Based on measured data, the organic matter content of these mudstones fully meets the material requirements for efficient oil generation.

With raw materials, you still need the right “cooking conditions.” The basin’s geothermal gradient is 3.5 to 4℃ per 100 meters. Due to heat flow rising from the mantle, at a depth of 2,000 meters the temperature exceeds 80℃. This is precisely the best range for organic matter to transform into oil, allowing the raw materials to be sufficiently cracked into oil.

Once raw materials and transformation conditions exist, the generated oil also needs a reliable space for storage. The basin’s reservoirs are sandstones formed by ancient river channels, with porosity between 13% and 20%. Their permeability is also excellent: they can store oil and allow it to flow smoothly—no complex modifications are required to produce.

A dual water-impermeable sealing system forms as thick, tight mudstones of about 1,500 meters overhead, combined with loess-like mudstones—like a natural airtight cover locking in the oil. On top of that, with the precise interception by an anticline fault-back syncline closure structure, it creates a complete closed loop of “generation → transformation → storage → sealing.”

In the past, the industry underestimated this area. The core reason was insufficient understanding of the synergistic oil-and-gas accumulation mechanism of “hidden structures in middle-sized and small basins.” This discovery fills that knowledge gap and provides geological theoretical support for exploration in similar basins.

A Joint Effort between Central and Local Levels Breaks the Stalemate

That said, exploration in middle-sized and small basins has long been a tough nut. The essence of its predicament is market failure characterized by “high risk and low expected returns.”

Complex geology, high cost per well, and a low success rate make commercial capital generally hesitant. At the same time, public-interest exploration has long been absent, forming a vicious cycle of “exploration gaps → lack of understanding → even less willingness to explore.” The Sanmenxia Basin had previously been categorized as a poor-oil unit, and no one had applied to renew exploration rights—this is the true depiction of that dilemma.

This breakthrough relied on a brand-new collaborative mechanism. In December 2023, the Henan provincial government signed an agreement with the China Geological Survey to establish a model of “government-led, public-interest first, and commercial follow-up.”

The China Geological Survey took the lead in shouldering high-risk public-interest surveys. The breakthrough of Well Yaxia Di 1 clarified the “household account” for subsequent development. With this foundation in place, the Henan provincial government quickly formed a dedicated working team, linked up with companies for follow-up, and overall efficiency improved dramatically.

210-kilometer two-dimensional seismic exploration and 30-square-kilometer three-dimensional seismic exploration were carried out efficiently. The two evaluation wells had extremely high drilling accuracy. The predicted depth of the oil layers differed from the actual drilled depth by only a few meters, and the core recovery rate exceeded 95%.

After public-interest exploration paved the way, commercial strength rapidly took over. Wells Yiling 1 and Yiling 2 successively obtained high-yield oil flows, forming a virtuous cycle of “public-interest risk coverage → value released by data → profits from commercial conversion.”

This model has already prompted the transfer of exploration rights in places such as Xuchang and Zhoukou. The Zhongyuan Oilfield has also expanded its exploration deployment. Its deeper significance is that it has reshaped the investment mechanism for oil and gas exploration—turning public-interest geological work into a “navigation instrument” for market resources and breaking a long-standing institutional impasse.

The Value Goes Beyond Just One Oilfield

In 2025, China’s dependence on imported crude oil remains as high as 72%. The core contradiction in energy security is “insufficient self-sufficiency in supply.”

The discovery of 427 million tons of oil is by no means a mere numerical supplement. More importantly, it lies in its location and strategic value. It adds a “central China pivot” to China’s energy supply landscape, reduces reliance on remote transport producing areas, and enhances the energy system’s ability to withstand risks.

Specifically, the Sanmenxia area lies in the heart of central China. Compared with oil-producing regions in Xinjiang and Northeast China, its logistics radius is shortened by more than 40%. This locational advantage can quickly radiate the manufacturing clusters in central China and east China, directly improving regional energy dispatch flexibility and emergency supply assurance capacity.

Its value also lies in breaking a fundamental misconception in industry thinking. China has 356 middle-sized and small basins, with 267 still unassessed. In the past, they were seen as “supporting characters” in exploration—yet in essence, this reflects limitations in exploration technology and levels of understanding.

The Sanmenxia breakthrough proves that the oil and gas potential of middle-sized and small basins does not depend on size. It depends on the synergy of geological conditions. If this approach is applied and advanced, it may activate a potential reserves pool on the scale of tens of billions of tons, reshape the logic of China’s regional layout for oil and gas exploration, and push the industry to transition from “unlocking potential in large basins” to “comprehensive fine-grained exploration across the whole area.”

Beyond energy supply, this also empowers regional development in multiple dimensions. When the industrial chains such as oil and gas extraction, refining, and pipeline construction are established, they can directly create a large number of jobs. At the same time, it can strengthen the status of the energy hub at the junction of Henan, Shanxi, and Shaanxi, and link up ecological protection of the Yellow River basin with high-quality development.

Even more worthy of deep exploration is the green transformation path of “dual resource coordinated development.” Since the oilfield was unexpectedly discovered from a geothermal well, the foundation naturally exists for coordinated development of “oil and gas + geothermal energy.” This model can achieve “one well, two benefits,” and it also aligns with the dual-carbon goals of “balancing energy development with ecological protection,” injecting green momentum into traditional oil and gas development.

This unexpected geothermal well discovery not only rewrites the energy landscape of Sanmenxia but also transforms China’s understanding and mechanisms of oil and gas exploration.

It affirms the core value of basic research and strategic transformation, providing a new lever to address energy security challenges. In the future, will more overlooked middle-sized and small basins become China’s “hidden cards” for achieving energy independence?