A major oil shale company has successfully extracted shale oil underground for the first time, according to reports in the Jilin Daily.

After eight years of exploration, Jilin Unity & Strength Oil Shale Investment Development Co Ltd has demonstrated the effectiveness of its home-developed oil shale in-situ retorting technology.

"Our oil share project has entered the pilot stage, at which the daily output of a single well's shale oil can reach 200 kilograms and more, three times the initial stage," the company's technical director told Jilin Daily.

The shale oil, pumped from 300 meters underground and poured directly onto an iron plate by workers, could be lit and burned well, as Jilin Daily witnessed at the company's test site at Fuyu city.

After being filtered by gauze, the oil can be directly used in farm tractors.

Compared to the old technology, the oil shale in-situ method applies heat to the oil shale layer to make it crack and produce shale oil and natural gas underground. It's then pumped above ground. The process costs less and avoids generating a lot of waste residue, gas and water.

Project director Zhao Jinmin, who invented the technology said it was tailor made for the conditions in Jilin province.

"The oil shale is located deep, the layer is thin and the oil rate is low. It not only can make full use of the resources but also can protect the environment," he said.

The company, established in 2012, has a scientific research team consisting of four doctors and 46 graduate students and has invested 180 million yuan ($26.57 million) researching the technology.

It also set up an academic hub in Changchun, capital of Jilin province, to host leaders in the field Li Tingdong and Zhai Yusheng from the Chinese Academy of Sciences, and Kang Yuzhu, an academic from the Chinese Academy of Engineering.

"The new technology is entirely developed by our independent innovation research. Having full intellectual property rights on it, we have obtained eight national patents and are applying for two international patents."

The oil shale resources in China are rich and its development is one of the major projects in China's 13th Five-Year Plan.

Estimated to hold about 107 billion tonnes of oil shale, Jilin is home to 80 per cent of the total proven reserves in China.