Husky, CNOOC sign South China Sea exploration agreement

Aug. 17, 2004
Husky Energy Inc. subsidiary Husky Oil China Ltd. signed an oil exploration contract with China National Offshore Oil Corp. (CNOOC) for Block 29/26 in the Pearl River Mouth basin of the Eastern South China Sea. The block, 300 km southeast of Hong Kong, covers 3,965 sq km in water 300- 2000 m deep.

By OGJ editors

HOUSTON, Aug. 17 -- Husky Energy Inc. subsidiary Husky Oil China Ltd. signed an oil exploration contract with China National Offshore Oil Corp. (CNOOC) for Block 29/26 in the Pearl River Mouth basin of the Eastern South China Sea. The block, 300 km southeast of Hong Kong, covers 3,965 sq km in water 300- 2000 m deep.

CNOOC shot more than 4,500 km of high quality 2-D seismic in the area during 1986-2004 and said the block has good exploration potential.

The exploration period—to 2011—will be divided into three phases, with one wildcat drilled per phase. Husky will drill the first well in 2005, subject to rig availability.

Husky will fund 100% of the exploration costs, while CNOOC retains the right to back into the development project with a 51% interest.

Husky also plans to drill two shallow water wells on its 23/15 and 23/20 blocks in the Beibu Gulf within the next 2 years, where 1,000 sq km of 3-D seismic discovery has been completed. Those blocks are 450 km southwest of Hong Kong, near Hainan Island.