Phillips approves Bohai Bay development plan

Phillips Petroleum Co. said Thursday it will begin the first development phase of Peng Lai (PL) 19-3 field on Block 11/05 in China's Bohai Bay. Phillips noted that it has made two new oil discoveries on the block, bringing its total number of finds there to six. 'With six discoveries and several large additional prospects identified, we're extremely optimistic about the potential of this block,' said Bill Berry, vice-president of the Eurasia exploration and production division.


Phillips Petroleum Co., Bartlesville, Okla., said Thursday it will begin the first development phase of Peng Lai (PL) 19-3 field on Block 11/05 in China's Bohai Bay.

The company's board of directors approved expenditure for the first phase. A company spokeswoman said Phillips isn't disclosing the total expenditure amount.

Phillips did note that it has made two new oil discoveries on the block, bringing its total discoveries there to six. "With six discoveries and several large additional prospects identified, we're extremely optimistic about the potential of this block," said Bill Berry, vice-president of the Eurasia exploration and production division.

Phillips plans to begin production from the first phase of its PL 19-3 development program in first quarter 2002 at an estimated gross rate of 35,000-40,000 b/d of oil.

To fully integrate the knowledge gained from the reservoir performance in Phase I, Phillips plans to start production from Phase II in late 2004 or 2005. "We are quite pleased with the results to date from this block and fully expect it to become one of our key production areas," said Berry.

This spring, Phillips made two new discoveries on Block 11/05. The PL 9-1-1 well was drilled on a large, 6-mile-long structure in the northeast portion of Block 11/05, 25 miles north-northeast of PL 19-3 field. The second discovery, PL 25-6-1, was made on a separate anticline structure 3 miles east of PL 19-3. Both discoveries are in 75 ft of water.

A third wildcat well, PL 25-2-1, drilled 13 miles south of the PL 19-3-1 discovery well, was a dry hole.

The PL 9-1-1 discovery well reached 5,016 ft TD on Apr. 15, encountering a net pay interval of 62 ft in the Guantao sandstone and a gross pay zone of 610 ft in pre-Tertiary granite wash. Extensive formation pressure data was collected, confirming the presence of a thick hydrocarbon column. Gravity of the oil ranged from 11 to 17� API.

The PL 25-6-1 discovery well was drilled immediately following PL 9-1-1 and reached 7,731 ft TD on May 31. This well encountered 308 ft of net pay in the Guantao. Extensive wireline formation pressure data and samples were collected. Drillstem testing was deferred to a future appraisal well. Oil gravity ranged from 16 to 19� API.

The Nanhai-1 drilling rig was released June 12.

Immediate plans are to evaluate the data from these wells before the end of this year, says Phillips. The fourth exploration well, originally planned for 2000, will become part of the company's next drilling program, scheduled for later this year or early in 2001. Commercialization studies of these discoveries will be jointly initiated with China National Offshore Oil Corp. (CNOOC).

Phillips acquired the right to explore Block 11/05 in 1994 when it signed a petroleum contract with CNOOC. Phillips holds a 100% undivided working interest in the 2.3 million-acre block. CNOOC has the right to acquire up to a 51% interest in any development in the block.

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