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PHILLIPS STARTS OIL FLOW OFF CHINA

Nov. 28, 1994

A group led by a unit of Phillips Petroleum Co. has placed Xijiang 24-3 oil field on stream in the South China Sea off China. Initial production is 20,000 b/d, with peak flow expected at 66,000 b/d within 2 years with a second field on production. Crews completed installation of the Xijiang 24-3 platform last spring. Work on a companion platform to produce the Phillips group's Xijiang 30-2 field is under way. The second platform is to be installed early next year about 8 miles from Xijiang

A group led by a unit of Phillips Petroleum Co. has placed Xijiang 24-3 oil field on stream in the South China Sea off China.

Initial production is 20,000 b/d, with peak flow expected at 66,000 b/d within 2 years with a second field on production.

Crews completed installation of the Xijiang 24-3 platform last spring. Work on a companion platform to produce the Phillips group's Xijiang 30-2 field is under way. The second platform is to be installed early next year about 8 miles from Xijiang 24-3.

Oil will flow through seabed pipelines to a floating processing, storage, and offloading (FPSO) unit stationed between the platforms. The FPSO, a modified tanker named Nanhai Kai Tuo, will hold 1 million bbl of oil until shuttle tankers can load the oil for transport to refineries.

The project represents a $600 million investment by Phillips unit Phillips Petroleum International Corp. Asia and partners China National Offshore Oil Nanhai East Corp., a regional organization of China National Offshore Oil Corp. (Cnooc); and Pecten Orient Co. and Shell Exploration (China) Ltd., operating as an offshore China combine. Xijiang 24-3 working interests are Phillips and the Shell team 24.5% each and Cnooc 51%.

Phillips began exploring the South China Sea in 1984. It found Xijiang 243 field in 1985 and Xijiang 30-2 field in 1988. Phillips, Pecten, and Chinese officials signed an agreement in 1991 to develop the two fields.