Husky Energy is testing the first of two exploration wells planned on Block 15/33 in the Pearl River Mouth Basin of the South China Sea to assess potential for development (OGJ Online, Apr. 17, 2017).
The well, in 80 m of water 160 km southeast of Hong Kong, encountered four oil-bearing zones with combined thickness of 70 m.
After testing the first well, Husky will drill a well on a separate structure on the 155-sq-km block.
It plans to drill two exploratory wells on nearby Block 16/25 in the second half of 2018.
Husky holds a 100% working interests in the blocks under production sharing contracts with CNOOC Ltd., which can back in for 51% in the event of commercial discovery. Husky would be able to recover exploration costs from production.
Husky and CNOOC have signed PSCs structured similarly for Blocks 22/11 and 23/07 in the Beibu Gulf area of the South China Sea.
Block 22/11 covers 1,663 sq km with water depths of 40-80 m. Block 23/07 covers 1,210 sq km with water depths of 20-40 m.