Sinopec: refiner may spin bit in disputed waters with Vietnam.
Sinopec plans wildcat in disputed waters
China's Sinopec aims to drill its first deep-water well next year in the South China Sea, ending a moratorium on exploration in waters near areas disputed by Vietnam, two company officials said.
The move marks the first foray into deep-water offshore drilling for Sinopec, which is mainly a refiner with limited experience in oil drilling. It also underlines a renewed industry interest in the search for oil in the waters off China.
Sinopec has begun a 3D seismic survey in an area of 1250 square kilometres in the Qiongdongnan basin, and drilling at the best prospects will follow, the Sinopec officials told Wall Street Journal yesterday.
Sinopec has a license to explore more than 8000 square kilometres in the basin, including some blocks in territorial waters claimed by Vietnam. However, the planned survey will be carried out in an undisputed area, the officials said.
Originally scheduled to take place last year, the survey was shelved on government orders because of a border dispute with Vietnam, triggered by PetroChina’s planned exploration in the Huaguang Trough of the South China Sea.
The Sinopec officials said China was keen to avoid a confrontation with its neighbour, as it was hosting the 2008 Olympic Games.
China is becoming more aggressive in its search for new sources of oil and natural gas, as its energy needs rise - even at the risk of aggravating territorial tensions with neighbours.
Drilling activity by state-owned China National Offshore Oil Corporation in the East China Sea has been a constant irritation to Japan. China has also claimed the Spratly Islands in the South China Sea, a claim disputed by Brunei, Malaysia, Taiwan and the Philippines.
An earlier 2D seismic survey across the entire 8000 square kilometre area that Sinopec can explore pointed to a potential resource of 800 billion cubic metres of natural gas, one of the officials said. If confirmed by exploration and appraisal drilling, the area would rank among the biggest offshore reserves in China.
By comparison, Canadian company Husky Energy’s discovery in the Liwan field, which is China's largest offshore gas find to date, holds an estimated 112 Bcm to 168 Bcm.