The country should look increasingly offshore to shore up
dwindling onshore production, oil companies were told
yesterday.
"The current offshore oil and gas exploration and production
should focus on the Bohai Bay basin and the Pearl River estuary as
the top priority," Pan Jiping, a senior researcher with the
Ministry of Land and Resources, said at China Offshore Summit
2007.
"As for deep-sea exploration, the firms should invest more in
blocks in the northern part of the South China Sea," Pan said.
More than 80 percent of China's proven offshore oil reserves are
located in the Bohai Bay basin, and the country needs to beef up
exploration in the Pearl River estuary, the South China Sea and the
southern Yellow Sea, he said.
The southern Yellow Sea is the only offshore area where no major
oil and gas reserves have been discovered so more efforts should be
made there, Pan emphasized.
The ministry is expected to publish an appraisal of China's
overall offshore fossil fuel reserves soon, giving more detailed
guidelines to oil companies.
"We are also considering reforming the current project review
and approval format to give more opportunities to international
players. We may adopt more international practices, such as
bidding, to allocate mining rights," Pan stressed.
He called on Chinese offshore companies to develop technologies
for deep-sea oil and gas exploration.
Han Xuegong, a senior consultant with China National Petroleum
Company (CNPC), the country's largest oil and gas producer, noted
that given soaring energy demand and the decreasing production in
oil fields located in the eastern part of the country, it is
natural for national conglomerates to make more efforts
offshore.
"It is true that developing offshore reserves involves higher
risks and requires more investment and technical expertise. But
given the current global oil prices, it is absolutely worth the
risk.
"That is mainly why CNPC and China National Offshore Oil Corp
(CNOOC) are marching offshore," Han said.
Both CNPC and China's top offshore oil company CNOOC announced
yesterday that they are developing deep-water drilling platforms
with a 3,000-meter extraction capacity.
Zhang Weiping, deputy chief economist of CNOOC, said that 70
percent of oil reserves in the South China Sea are in deep water,
which require deep-sea drilling capacity.
(China Daily April 3, 2007)