China National Offshore Oil Corporation (CNOOC) plans to offer five offshore blocks in the South China Sea's Pearl River Mouth basin to foreign companies for exploration, as part of its seven-year action plan to accelerate offshore exploration.

Sources said the blocks on offer cover 1000 square kilometres and are located in both deep and shallow waters, where CNOOC is working with foreign companies on 12 oil and gas projects.

The company has budgeted to drill 45 exploration wells in the South China Sea this year, up from 35 last year, of which 15 had been completed by the end of April.

From now until 2025, CNOOC plans to bring online 12 oil and gas fields and develop another 25, involving total hydrocarbon reserves of 400 million tonnes (around 2.9 billion barrels of oil equivalent).

This comes as part of its seven-year action plan to boost production in the area by 30% to 20 million tonnes per day (400,000 barrels per day) by 2025.

The company is now prioritising deep-water wells in the Pearl River Mouth basin's Baiyun trough, hoping to strike major discoveries this year.

The only deep-water discovery so far in the basin is the Liwan 3-1 gas field. At the Liuhua 29-1 deep-water gas field, which is Liwan’ s third phase, CNOOC and operator Husky Energy of Canada are installing seven subsea wells at water depths of between 520 and 1150 metres. First gas is expected at the end of 2020.

Sources said the Pearl River Mouth basin holds huge hydrocarbon potential with 5 billion tonnes of oil and 2 trillion cubic metres of theoretical reserves to be confirmed for commercial development.

At the Qiongdongnan basin in the western part of the South China Sea, CNOOC will open up a few deep-water blocks to foreign companies and is ready to farm out some stakes in producing fields or those under development, sources said.

They added that the prospects to be offered will be located in the north or south of the giant Lingshui gas find.

The Lingshui development is on track for first oil at the end of 2020, with initial flows expected to be about 3.3 billion cubic metres per annum of gas.

Just this week, Chinese yard CIMC Raffles started the construction of the hull of the deep-water semi-submersible production platform for the Lingshui 17-2 development, which is subcontracted from China's Offshore Oil Engineering Company (COOEC).

As part of the action plan, CNOOC will build a gas pipeline grid linking the gas production hub in the Qiongdongnan basin with markets in Guangdong province, Hong Kong and Macao, according to sources.

The proposal to build the grid has been submitted to the government for endorsement.

Weekly

CNOOC plans to offer Pearl River blocks