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CNOOC, Husky to explore deep water oil
(AP)
Updated: 2005-12-07 19:18

Duan Cheng Gang, the vice president of CNOOC's Shenzhen Branch, told reporters the company is in talks with many foreign companies on teaming up to explore and develop other deep water oil and gas fields in offshore China.

"They know there is a very rich oil and gas reserve there (in the South China Sea), that is why they are so keen on coming to us," said Duan.

"We can definitely self-finance the explorations, but we need the technology, so we have to work with those foreign companies," he said, but declined to elaborate.

According to CNOOC's Web site, the company had net oil reserves of 357.7 million barrels of oil equivalent and a net natural gas reserve of 3,215.6 billion cubic feet in the South China Sea as at the end of 2004. The figures represent about 25 percent of CNOOC's total oil and 70 percent of its gas reserves.

CNOOC Ltd. also has oil and gas fields in Bohai Bay along China's northeastern coast, in the East China Sea, and in Indonesia.

Duan said the cost of drilling a deep water exploration well is about $20 million to $30 million, or two to three times higher than drilling one in shallow waters.

"We are optimistic that there will be reserves in the bloc that we are going to drill as there are proven reserves neighboring it. But we have to explore it before we can tell how much reserves it has," Duan said.

The bloc will be able to start producing oil and gas in four to five years after commercial drilling starts, he said.


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