China National Offshore Oil Corp. (CNOOC) plans to drill 162 production wells this year to offset the expected natural production decline of about 5 million tonnes from existing fields. The new wells will be drilled mainly in the Bohai Sea, where CNOOC plans to bring three new fields on stream this year.
The three are Qikou 17-2 field, with start-up expected in June, and Sui- zhong 36-1 and QHD 32-6 fields, with first oil slated for yearend. At Qikou 17-2, drilling of 31 production wells will bring capacity to 680,000 tonnes/year of crude.
CNOOC plans to complete the initial drilling phase there in April. The first-phase project will then go into production in October. By the end of 2002, the oil field will produce at full capacity of 3.4 million tonnes/year.
Suizhong 36-1, with its second-phase production scheduled to start at yearend, will have a peak production capacity of 5 million tonnes/year. Suizhong 36-1 completed its first phase a few years ago. The development of these fields will cost 4.6 billion yuan.
CNOOC plans to produce 16.445 million tonnes of crude and 4.27 billion cu m of natural gas in 2000, level with 1999 output.
In another development, CNOOC expects to sign contracts with Royal Dutch/Shell in March or April to pave way for construction of a petrochemical complex in China starting in the second half of this year (OGJ, Jan. 10, 2000, p. 14). The company has set March or April as its target to settle all contractual issues with Shell. CNOOC 's timetable calls for establishing a joint venture with Shell in June. Both companies expect to complete construction in 2005.
CNOOC and Shell signed a framework agreement Feb. 16, 1998, in The Hague to jointly build a $4.5 billion petrochemical complex led by an 800,000 tonne/year ethylene cracker Huizhou, Guangdong. The project is known as the Nanhai project.
CNOOC will begin the project by investing 5 billion yuan. It will own 40% of the venture. The other shareholders are Shell, 50%, and China Merchants Holdings and Guangdong Investment & Development Bank, 5% each.
The project is one of only three ethylene joint ventures China has approved to date. The other two, each with capacity of 600,000 tonnes/year, are Yangzi Petrochemical Corp. and BASF AG's project in Nanjing and Shanghai Petrochemical Corp. and BP Amoco PLC's project in Shanghai.
Yanzi and BASF plan to set up a joint venture in June and start operation by the end of 2004. Shanghai and BP Amoco are expected to establish a joint venture by end of 2001.
