CNOOC Makes Major Oil and Gas Discoveries

OIL FOCUSCNOOC Makes Major Oiland Gas DiscoveriesChina National Offshore Oil Corporation announced in the country. It posted record-high net profits of 70.26in mid-August that it has made a major discovery in the billion yuan for the whole of 2011Bohai Sea, successfully appraising two wells in the sea's In the first half of this year, oil and gas revenues dippedQinhuangdao 29-2" structure. The offshore oil giant 1. 4 percent from a year earlier, to 95.66 billion yuansaid in a statement that it has discovered 218.4 meters of the Hong Kong-listed company said. Oil and gas outputoil pay zones in the Qinhuangdao 29-2E-4 well, with a totaled 160.9 million barrels, down 4.6 percent year-on-thickness of up to 133.7 meters. The well is capable of year. That was a result of an oilfield in China's Bohai Bayproducing 6,600 barrels of crude oil and 4.5 million cubic being suspended because of an oil leak. The drop was alsofeet of natural gas per day, according to the companys due to maintenance of oilfields and the sale of interestsevaluation. The Qinhuangdao 29-2 structure is located in in a block in Indonesia. The company's average oil pricethe central and northern part of Bohai, with an average stood at USS116.91 per barrel and the average natural gasdepth of 27 metersprice reached US$5.9 per 1,000 cubic feet, representingIn addition to Qinhuangdao 92-2 structure, the year-on-year increases of 8. 1 percent and 20 percentoffshore oil producer has revealed two other new offshore respectively. The company aims to meet its annuadiscoveries- one in the Bohai Sea and another near the production target of between 330 million and 340 millionPearl River Estuary. Luda 6-2, in the waters of Liangdong barrels of oil equivalentBay in northeastern Bohai Sea, has an average water depthof 31 meters and is estimated to produce 850 barrels of oil US firms may join CNoOC oil plansevery day. Lufeng 15-1, in the waters of the Pearl River US companies may bid for oil exploration projectslouth Basin, is at a 283 meter depth and has an estimated the South China Sea, according to China's largest offshoredaily output of 800 barrels. Zhu Weilin, vice-president oil explorer. "US companies are displaying interest inof CNOOC and general manager of the department of bidding for the oil and gas projects, which have beenexploration said Lufeng 15-1, particularly, is expected progressing as scheduled, "CNOOC Chairman Wang Yilinto open up new fields for independent exploration in the recently said at China-US Enterprises Investment andPearl River Mouth BasiCooperation Forum. In June this year, CNOOC, issuedtenders seeking joint exploitation of nine offshore blocksCNOOC H1 profits falls 19 percentin the South China Sea. The nine blocks cover more thanCNOOC Ltd, has seen its half-year net profits fall 160,000 square kilometers and are 300-4, 000 meters19 percent to 31.87 billion yuan(USS502 billion). The deep. Seven blocks are located in the Zhongjianan Basindeclining demand for crude oil in global markets as well and two are in areas covering parts of the Wan'an andas the economic downturn hit the companys profitabNanweixi basins中国煤化工the offshore oil giant said in its half-year report releasedCNOOC will inCN MHG32 billion)in August. Despite the 19 percent year-on-year fall, the in developing the South China Sea blocks over the nextcompany remains one of the most profitable companies 20 years, with the aim of building an annual capacity ofCHINA OIL&GAS9No.3.2012OIL FOCUS50 million tons in the deep sea area by 2020. Companies blocks in the second batch made available by CNOOC forfrom a number of countries such as Malaysia and Thailand cooperation include one block located in Bohai Bay, threehave displayed an interest in developing these projects in East China Sea, and another 22 in South China Sea,CNOOC set a target to increase oil and gas output to a total area of 73, 754 square kilometer ?e 26 blocks coverwith CNOOCaccording to a statement by CNOOC.T120 million tons of oil equivalent by the end of 2020, Foreign companies may access data concerning thedouble the amount in 2010. China has 18,000 kilometers blocks after applying. Data will be available for viewinof coastline and a continental shelf of 1.3 million square until November 30."Cooperation between CNOOC andkilometers, The countrys rich offshore resources are foreign companies will help develop better deepwater oilmainly located in the Bohai Bay region, East China Sea and gas exploration technology, which will become moreand South hina Seanecessary to secure China's future energy supplies. " BaiThe South China Sea is the worlds fourth-largest said. He predicted that British oil companies may have thedeepwater region for oil and gas exploration after the most interest in the latest cooperative tenders because theyGulf of Mexico, West Africa and Brazil. The South China have more experience of the kind of deepwater drillingSea region has proven oil reserves of around 7.7 billion required, from operations in the North Seabarrels, with an estimated 28 billion barrels in totalNatural gas reserves are estimated to total around 266 Team up with Shell for diversification of energytrillion cubic feet. Experts said offshore exploration will supplyhelp reduce China's dependence on oil importsCNOOC has signed contracts with Royal Dutch ShellIn addition to the nine blocks mentioned above, Plc to explore for oil and gas in the South China Sea andCNOOC has recently opened 26 new offshore blocks off the coast of Gabon in West Africa, marking the latestfor cooperation with foreign companies. It is the second step taken by a Chinese company to diversify its energyround of joint development tenders by the State-owned supply.V凵中国煤化工oil and gas giant this year for offshore oil resourcesCNMHGOC agreed onafter inviting foreign companies to bid for nine blocks to explore two offshore oIl blocks -b2/02 and 62/17in the western area of the South China Sea in June. The- which lie in the Yinggehai Basin off South Chinas为方数据OIL FOCUSHainan Island. Shell has agreed to shoulder the projects cooperation with Shell in the South China Sea and Westexploration costs. CNOOC, for its part, will be able Africa can help Chinese companies learn from foreignto claim an equity interest of up to 51 percent of any companies. " As the biggest foreign gas station brand incommercial oil and gas discovered in the blocks. "The China, it is important for Shell to have more upstreamcision is highly significant for China's strategic energy supportreserves while(the country) remains highly dependent onoil imports, "said Zhang Jing, an oil analyst at JYD Online Signature of US$1.56b coalbed methane dealCo. Ltd, a Beijing-based bulk commodity consultantCNOOC Ltd. of which CNOOC is the parentadding that CNOOCs decision to work with Shell in West company, has signed a deal to spend 9.93 billion yuanAfrica will help China diversify its future oil imports (USS1.56 billion) to explore for coalbed methane(CBM)and secure its energy supplies. However, an industrial in the mainland over the next five years as part of a 30-insider said it would be hard to accurately predict how year agreement. A deal on the project was signed betweenmuch it will cost to explore the two blocks, saying neither CNOOC Ltd. and China United Coalbed MethaneShell nor CNOOC has published data showing how large Corporation Ltd. (CUCMC), which is half owned byand deep the areas are. "The exploration will take at CNOOC and half owned by China National Coal Groupleast four to five years before there are any commercial Corporationdiscoveries. the insider saidCNOOC Ltd said the deal with China United wouldIn Gabon, CNOOC will acquire a 25 percent stake in give it an opportunity to develop its clean energy businessa pair of offshore exploration blocks- BC9 and BCD10. and work onshore in China. Under the agreementIt will pay Shell a quarter of what that company has spent exploration would cover a 10, 866 square kilometers (4, 195on exploration in those two areas, as well as for future square miles) area in Shanxi, Shaanxi, Anhui, Shandong.exploration. The blocks are in water that is between 1.200 Yunnan, Ningxia, Hebei, Hubei and Henan provincesand 2, 100 meters deep and are considered to be deepwater Future coalbed methane production from the projectassets. China needs foreign companies to take part in its would be shared between CNOOC Ltd and CUCMCInSouth China Sea exploration. " China's technology that general, CNOOC Ltd. will take up to 70 percent of futurecan be used in exploring for deepwater oil still lags behind development and production costs of a coalbed methanewhat's found internationally, "said Liao Na, information field, while CUCMC will take up the remaining 30director at the energy consultancy ICIS CI Energy. "This percentALaMEiN■■■中国煤化CNMHCHINA OIL GAS 11