By the OGJ Online Staff
HOUSTON, June 22 -- China Petroleum & Petrochemical Corp. (Sinopec) and China National Offshore Oil Corp. said Friday they will likely develop natural gas reserves in the Xihu trough of the East China Sea with foreign oil and gas companies.
Earlier this year, the Chinese government allowed CNOOC to back into the development for no cost with a 50% working interest. Since then, Sinopec and CNOOC have been negotiating a framework for the joint development of the area. CNOOC will operate E&P activity in the area.
The 50% holding will soon be injected into China National Offshore Oil's subsidiary CNOOC Ltd.
Sinopec conducts E&D in the area through unit Sinopec Star Petroleum Co. Ltd. Sinopec unit China Petroleum & Chemical Corp., which is listed in Hong Kong and New York Stock Exchanges, is expected to buy Sinopec Star's upstream assets some time this year (OGJ Online, Feb. 9, 2001).
The trough is in East China Sea sedimentary basin, 400 km east of Shanghai.
CNOOC said previous Sinopec exploration wells have found commercial gas reserves in the area, but did not give estimates.
The deal doesn't include oil and gas reserves of the producing Pinghu field in the East China Sea. Pinghu is jointly owned by CNOOC, Sinopec Star, and Shanghai-based energy companies.
Pinghu is producing 1 million cu m/day of gas, which should double in 2003.
