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Offshore Oilfield to Pump in 2002
China is expecting to see its largest offshore oilfield start producing in early 2002, it was revealed after the signing of an agreement in Beijing.
China National Offshore Oil Corp (CNOOC) and Phillips China Inc, a subsidiary of the US-based oil giant Phillips Petroleum Company, signed the agreement Friday to jointly develop Penglai 19-3 oilfield in North China's Bohai Bay.
To date, CNOOC has signed 146 contracts with 70 oil companies from 18 countries and regions since its establishment in 1982.
The latest agreement is a supplement to a previous accord that was signed by the two companies early in 1995 to explore oil in a nearly million-hectare area of the bay.
Under terms of both agreements, CNOOC holds 51 per cent of the field, which was discovered by Phillips in May last year, and Phillips the rest.
All the costs accrued during the development period will be shared between the two companies, the contract says.
Plans for the first-phase development are expected to be approved by the Chinese authorities next month.
Phillips is now embarking on a feasibility study for the second phase, with production anticipated in 2005.
Located 128 kilometres south from Dalian, in Liaoning Province, the field covers a 50-square-kilometre area where the water is 23 metres deep.
The field, the country's second largest after Daqing in Heilongjiang Province, Northeast China, is expected to pump out 35,000 to 40,000 barrels of oil a day from the first quarter of 2002, sources with Phillips said.
The total reserves of the field is estimated at 4.3 billion barrels, said experts.
Currently, four oil exploration contracts have been signed between the two.
CNOOC, the country's largest offshore oil producer, is reported to be investing 120 billion yuan (US$14.6 billion) to tap oil reserves in China's offshore waters over the next five years.
CNOOC also established a strategic alliance with the Royal Dutch/Shell Group of Companies (Shell) early last month to jointly explore oil and gas fields in Bohai Bay and gas reserves in the Xihu Trough, in the East China Sea.
With good early reports from Bohai Bay and the South China Sea, CNOOC now hopes to double its oil and gas output from 1999's 20 million or so tons to 40 million tons by 2005, according to CNOOC officials.
CNOOC Ltd, a spin-off company of CNOOC, is planning dual overseas flotations on the New York and Hong Kong stock markets early next year. But officilas have not revealed any details about the amount of issues.
Bohai Bay is believed to have oil reserves of more than 10 billion barrels.
Source: chinadaily.com.cn
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