Cnooc Plans To Drill Deepwater Wells In South China Sea Next Year
December 06 2009 - 8:29PM
Dow Jones News
Cnooc Ltd. (CEO) plans to start drilling deepwater wells in the
South China Sea next year, marking the company's initial foray into
deepwater oil and gas exploration, said an executive.
"In 2010, it's possible for us to drill one, two or even more
exploration wells," said Xie Yuhong, general manager of Cnooc's
unit in Zhanjiang.
He said the company, China's largest offshore oil producer,
hopes to drill deepwater exploration wells with international
partners in the South China Sea at depths of 1,500-1,800
meters.
Xie said he believes the South China Sea has tremendous resource
potential that could support the company's output development in
the future.
He said company officials made a series of overseas visits to
Australia, Brazil and Nigeria to share experience in deepwater oil
exploration technologies.
Cnooc's current exploration partners in the South China Sea
include independent oil and gas producer Devon Energy Corp. (DVN),
Canada's Husky Energy Inc. (HSE.T) and BG Group PLC (BG.LN).
However, he didn't give details on the company's deepwater
exploration plan.
The South China Sea is one of Cnooc's most important natural gas
and oil producing areas, with typical water depths ranging from 40
to 120 meters.
Cnooc's deepwater drilling plan underscores the blue-chip
company's drive to make the South China Sea a key production base
in the coming years, with the area estimated to contain 22 billion
barrels of oil equivalent.
With slower output growth expected after 2010, Cnooc needs to
develop remote deep-sea areas to help feed China's heavy energy
demand.
At the end of March, Cnooc said it expected its oil and gas
output to grow at a compound annual rate of 6%-10% between 2011 and
2015, down slightly from 7%-11% for 2005-2010.
Xie said he expects oil and gas output from the western South
China Sea to be 44.07 million barrels of oil equivalent this year,
up 13% from 38.97 million barrels of oil equivalent in 2008.
"I believe output in the western South China Sea next year will
exceed the level in 2009," Xie said.
According to Cnooc's 2008 annual report, it had 2.52 billion
barrels of oil equivalent of reserves by the end of 2008, including
960 million barrels of oil equivalent in the South China Sea.
-By Yvonne Lee, Dow Jones Newswires; 852-2802-7002;
yvonne.lee@dowjones.com