By the OGJ Online Staff
HOUSTON, Sept. -- CNOOC Ltd. and Shell Exploration China Ltd. signed a joint study agreement to explore options for developing oil and gas reserves in the Bonan Block of Bohai Bay.
Hong Kong-incorporated CNOOC Ltd. is 70.6% owned by China National Offshore Oil Corp. as its exploration, development, and production arm for offshore China and internationally.
The study is part of a strategic alliance between Shell Overseas Investments BV, a wholly owned subsidiary of Royal Dutch/Shell Group, and the CNOOC parent to develop gas markets along China's coastal regions (OGJ Online, Nov. 16, 2000).
The Bonan Block, situated close to several metropolitan areas of Shangdong Province, contains several oil and gas fields. Its two key structures -- Bozhong 26-2 and Bozhong 28-1 -- and three other fields are estimated to hold reserves of more than 160 million bbl of liquids and 300 bcf of associated gas, said officials.
Under their agreement, CNOOC and Shell will focus on how to commercialize the gas reserves.
"Shangdong is thirsty for incremental gas supply. The Bonan Block is ideally located," said Fu Chengyu, president of CNOOC Ltd. "Monetization of the gas cap will undoubtedly enhance the value of the fields' development."