Commercial shale gas production has been rapidly realized in China following a short learning period. Shale gas production is expected to reach 4.5bcm by the end of 2015, with the construction of a 7.5 bcm production capacity. Over 700 shale gas wells have been drilled in China, mostly by the three state-owned oil companies. The most significant factors that led to the rapid shale gas development in China include the abundant shale gas resources, a relatively complete R&D system, and strong support from various stakeholders (the central and local governments, oil companies, and the general public). China has a long way to go for building a booming shale gas industry, because of many big obstacles in the way of shale gas development, including complex geology, high operation costs, incomplete infrastructure and technology constraints. Looking ahead, however, there are firm grounds for the projection of a bright prospect of China's shale gas industry, as a 20 bcm annual shale gas production is reasonably expected in 2020.

Alang with big drop of oil prices, offshore oil engineering market demand is witnessing profound changes. This brings rare opportunities while huge challenges for Chinese offshore oil engineering enterprises. Chinese offshore oil engineering enterprises have made rapid development in recent years, but they still have a certain gap with European and American competitors. Only by answering the time's call for developmentof international market and having the courage to participate in international competition could Chinese offshore oil engineering enterprises grow strong unceasingly.

There is a great potential of both supply and consumption in oil & gas market in Northeast Asia, and the prospects of further cooperation is very broad. Sino-Russia cooperation on oil & gas will lay a crucial foundation for building a regional oil & gas market, and an increasingly opened trading system for oil & gas will also meet Japan and South Korea's need in building a diversified and stable assurance system of oil & gas supply. The strategic role played by Kozmino Port in Far East Russia and Shanghai oil and gas trading platform in China will be highlighted. Competition and cooperation through market mechanism will help to activate the interactions of resource flow and capital flow in Northeast Asia region, thus can also help energy consuming countries in the region to promote their disclosure power in global pricing system and gradually eliminate the Asian Premium.

Currently, oil companies face the "new normal" condition that the profit of their upstream business is shrinking with the plunge of oil price. This problem challenges the operation and management of the upstream business. Therefore, it is essential to find out the new approaches and key points of work, to achieve the goal of realizing a quality and sustainable development. From ten aspects, this paper discusses the challenges facing the upstream business of oil companies and puts forward corresponding roadmaps and strategies.

In this paper, by in-depth geological research of Kalamkas Oilfield in Central Asia, the geological body has been re-ascertained; combined with fine study of reservoir engineering, based on the understanding of the distribution of remaining oil, horizontal wells have been given full play to stabilizing oil production and controlling water cut, reducing the producing pressure drop, improving well productivity and other advantages, and the development and deployment has been optimized; horizontal wells have been applied to solve problems such as old well casing damages, shutting down wells, low-productivity and lowefficiency wells, and high water cut wells to improve the utilization rate of old wells; through separate layer system improved injection production pattern, adjustment wells have been optimized and deployed, and part measures wells have been preferably selected to tap the residual oil, improve the degree of reserves control, realize the stabilization of oil production and control of water cut in an old oilfield, and further improve the development effects.

Australia's liquefied natural gas industry has been growing rapidly in recent years. As China's natural gas production drops and its demand for clean energy sources, such as natural gas, grows, LNG, as a complement to piped natural gas, will be an important part of China's strategy of ensuring its natural gas consumption. Aware of this market opportunity, China's three big national oil companies, CNPC, CNOOC and Sinopec have all invested in Australia's LNG sector. Chinese oil companies are facing multiple challenges in their Australian LNG projects, including strict environmental laws and high labor cost. These companies should strengthen communication with local government to create a good investment environment for LNG projects.