Industry News

On January 6, CNOOC Limited announced that the company has successfully made a new mid-to-large sized natural gas discovery Lingshui 25-1 on the independent deepwater exploration.

The Lingshui 25-1 structure is located in the northeast of Ledong Sag in Qiongdongnan Basin of South China Sea, with an average water depth of about 980 meters. The discovery well Lingshui 25-1-1 was drilled and completed at a depth of about 4,000 meters and encountered the oil and gas pay zone with a total thickness of about 73 meters. The well was tested to produce about 35.6 million cubic feet of natural gas and 395 barrels of oil per day.

Lingshui 25-1 is another mid-to-large sized natural gas discovery following Lingshui 17-2 that the company made on independent deepwater exploration. The new discovery has not only opened up a new exploration chapter in deepwater area of northern South China Sea, but also further proven the good exploration prospects in deepwater area of Qiongdongnan Basin.

On December 8, CNOOC Limited announced that the company has started producing bitumen from Kinosis 1A (K1A), a new steam-assisted gravity drainage (SAGD) facility.

The K1A project, located approximately 12 kilometers south of the Long Lake SAGD and upgrader in Alberta, Canada, consists of steam-generating equipment, well pad facilities, 37 well pairs, and water and bitumen flowlines.  Bitumen produced from K1A is processed and upgraded at Long Lake, which has an operating capacity of about 72,000 barrels per day (bpd) of bitumen. K1A is designed to produce 20,000 bpd of bitumen and is expected to play a significant role in filling the Long Lake plant.

Nexen ULC, a wholly-owned subsidiary of the company, holds 100% interest and acts as the operator of K1A. The construction of K1A was completed on an industry-leading schedule with exceptional safety performance.

The three blocks mentioned above are located in the Yinggehai Basin of the South China Sea. Block 52/22 covers a total area of 1,896 square kilometers, and has a water depth of 60-300 meters; Block 52/26 covers a total area of 1,783 square kilometers, and has a water depth of 80-160 meters; Block 63/13 covers a total area of 698 square kilometers, and has a water depth of 80-140 meters.

According to the terms of the PSCs, CNOOC shall act as the operator of the three blocks mentioned above. Expenditures incurred during the exploration period will be borne by CNOOC and KUFPEC in a proportion of 20% and 80% of participating interest, respectively. Both parties will conduct 3D seismic data surveys and will drill exploration wells. Once entering the development phase, CNOOC has the right to participate in up to 70% of the working interest in any commercial discoveries in the blocks. After signing the abovementioned PSCs, CNOOC will assign all of its rights and obligations under such contracts, except for those relating to CNOOC's administrative functions, to CNOOC China Limited, a subsidiary of CNOOC Limited.

On December 10, CNOOC Limited announced that its parent company, China National Offshore Oil Corporation ("CNOOC"), has signed three production sharing contracts (PSCs) with KUFPEC (China) Inc. ("KUFPEC") for Blocks 52/22, 52/26 and 63/13 in the South China Sea.

On November 19, China Oilfield Services Limited saw successful delivery of the deepwater semi-submersible drilling rig COSLProspector it invested in and commissioned to build in Yantai, Shandong.

COSLProspector has adopted the world’s most advanced energy management and environment-friendly design concepts and is equipped with advanced technologies including DP3 closed loop, smart inverters, escape slipways and automatic defrosting. With the most advanced drilling system in the world and Dynamic Positioning System DP3 installed, this rig is certified by both Det Norske Veritas (DNV) and China Classification Society and has met the world’s most stringent requirements by Norwegian Petroleum Directorate and NORSOK petroleum industry safety standards. Compared with the other deepwater semi-submersible rigs in the COSL series delivered earlier, including COSLPioneer, COSLPromoter, COSLInnovator, this rig has sought accreditations including ICE-T, CLEAN and WINTERIZATION, reaffirming its ability to operate under freezing, environmental-friendly and cold winter conditions. It can adapt to 90% of the water conditions in the world. Upon delivery, the rig will go through all necessary tests and adjustments, scheduled to be deployed to perform deepwater operations in South China Sea within the first half of 2015.

On November 19, CNOOC Limited announced that the company made a mid-sized new discovery Lufeng14-4 in the Eastern South China Sea. 

The Lufeng14-4 structure is located in Lufeng Sag in the Pearl River Mouth Basin of the South China Sea with an average water depth of 145 meters. The discovery well Lufeng14-4-1 was drilled and completed at a depth of 4,098 meters and encountered oil pay zones with a total thickness of approximately 150 meters. The oil production of the well tested around 1,320 barrels per day. 

The successful exploration of Lufeng14-4 demonstrated the company’s remarkable breakthrough in the exploration area of the Paleogene System，and further proved the huge exploration potential of the Paleogene System in the Pearl River Mouth Basin.