In June 1903, Yu Yanbiao, native of Dali county, Shaanxi, on commission of the Major of German Navy Hanneken and Shichang Foreign Firm, came to Yanchang County for the negotiation of petroleum exploitation. He made a private contract with Zheng Mingde, one of county gentry, on the cooperation of oil exploitation in Yanchang, but was stopped by the government of Qing Dynasty. In that winter, the local Shaanxi authorities raised ten thousand liang of silver to launch the project, and set up Yanchang Petrobureau Plant.
In March 1905, Ministry of Foreign Affairs approved Shaanxi’s self management of Yanchang oil project. The county magistrate candidate Hong Yin was assigned as the general manager and went to Hankou to test oil products. He employed a Japanese technician Abuzhengzhi (in mandarin) to explore oil resource in northern Shaanxi. In October the provincial inspector Cao Hongxun, together with Sheng Yun, governor of Shaanxi and Gansu, submitted the memorial to the Qing dynasty government “The experimental scheme on Yanchang oil mining for road construction and prosperity”. On October 22 in lunar calendar (or November 8) Emperor Guangxu wrote: “Trade Ministry knows it.” Thus they set up the first land petroleum plant of China, Yanchang Petroleum Plant.
In October 1905, the provincial inspector Cao Hongxun, together with Sheng Yun, governor of Shaanxi and Gansu, submitted the memorial to the empress and the emperor on road construction proposal, which indicated that the Yanchang oil was “of rally good quality abundant in resources”, and the expenditure ranged “from 100 thousand to 200 or 300 thousand”. With the employment of Japanese technician, they took it urgent to connect Tongguan and Yanchang with road. On 22 the emperor wrote: “Trade Ministry knows it.”
In February 1907 the Japanese technician arrived in Yanchang together with equipments. He explored and located the well position out of the west gate. In April they set up equipment on the platform, started drilling on June 5, and completed drilling on September 10 to the depth of 81 meters, producing 1 to 1.5 tons of oil on the initial day. The production stopped after 1934 when the well dried up. In 1978 the well was extended to the depth of 118 meters, and after fracturation produced 2.9 tons of oil on the initial day. The well was extended to the depth of 152 meters in September 1985, and after fracture produced 3 tons on the initial day. Thus it terminated the oil infertility history of mainland China.