By an OGJ Online Correspondent
BEIJING, Apr. 22 -- Agip China BV has begun drilling its first exploration well on the natural gas-prone Sebei block in northwestern China's Qaidam basin. Drilling is expected to conclude in July on the well, which is designed to reach TD at 4,650 m. Agip is the only foreign company currently undertaking onshore exploratory drilling for oil and gas in China, the company said.
Agip signed a $15 million contract with China National Petroleum Corp in 2000 allowing it to explore the block (OGJ Online, Nov. 27, 2000). Last year, Agip completed 400 line-km of 2D seismic surveys on the block.
Sebei field, the largest in Qinghai Province's Qaidam basin, has proved and probable gas reserves of more than 90 billion cu m, according to CNPC estimates.
Qinghai Oil & Gas Corp., a unit of CNPC subsidiary PetroChina Co. Ltd., is now producing gas from shallow structures on the Sebei block.
PetroChina's Qinghai plans to raise gas production capacity at Sebei by 21% this year, to 1.15 billion cu m/year from 950 million cu m/year in 2001. Sebei gas production is transported via a 953 km pipeline to Qinghai provincial capital Xining and to Gansu provincial capital Lanzhou. Work on that pipeline was completed last year.