LNG

China National Offshore Oil Corp. (CNOOC), the Chinese energy major with international and domestic LNG interests, said the first ultra-deep natural gas well in the Bohai Sea offshore northeast China had out-performed initial estimates amid ambitious domestic gas production plans.

China National Offshore Oil Corp., the Chinese energy major and with international and domestic LNG interests, has claimed a “major exploration breakthrough” with a natural gas play in ultra-deep waters of the South China Sea.

The Lingshui 36-1 gas field is located in the western South China Sea with an average water depth of around 1,500 metres.

The main gas-bearing play is the Ledong formation with an average burial depth of 210 metres.

CNOOC said the field has been tested to produce over 10 million cubic metres per day of open flow natural gas.

“The exploration in ultra-deep water ultra-shallow gas plays in the South China Sea is faced with world-class engineering and technical challenges,” the company explained.

Success

CNOOC Chief Executive and President Zhou Xinhuai said the successful testing of Lingshui 36-1 was a breakthrough for the exploration in such plays.

“The company will continue to tackle the challenges on the exploration and development of the resources in such plays, to expedite the utilization of natural gas in deep waters,” he added.

“The successful testing of Lingshui 36-1 further expands the resource base for the development of a trillion-cubic-metres gas region in the South China Sea,” stated Zhou.

CNOOC said in May 2024 that production started at its largest natural gas field in the central Bohai Sea offshore China.

CNOOC said start-up was at the Bozhong 19-6 Gas Field in Block 5 .

The Bozhong 19-6 natural gas and condensate field phase I development project is the first 100 Bcm field in Bohai Bay to be put into production.

CNOOC said the field would provide the Beijing-Tianjin-Hebei and Bohai Rim regions with “a more stable and reliable” supply of clean energy.

The company is also using the development to promote the green and low-carbon aims of China.

The main production facilities include a wellhead platform with 10 development wells planned to be commissioned and full production reached by 2026.

CNOOC holds 100 percent interest in the Bozhong 19-6 project and acts as the operator. 

China National Offshore Oil Corp., the Chinese energy major and LNG player with growing natural has interests, has outlined its strategy in a post-earnings conference call after reporting a fall in profits despite record production.

China National Offshore Oil Corp. (CNOOC), a leading LNG market participant among Chinese oil and gas majors, reported a more than 8 percent fall in third-quarter profit on lower realised oil and natural gas prices even as production increased.

China National Offshore Oil Company (CNOOC), a leading LNG market participant among Chinese oil and gas majors, has outlined its 2023 strategy with higher spending plans, including the targeting of more natural gas, both offshore and in unconventional onshore developments.

CNOOC said the offshore focus in China was on the South China Sea, including development of the Shenhai-1 gas field to promote efficient exploration and development of adjacent gas discoveries.

“We will also focus on five key projects including multi-stratal exploration around the Baodao 21-1 gas field and the rolling exploration around the Yinggehai gas field,” explained CNOOC.

Around the existing offshore Bohai gas fields, Chinese largest in the northeast, it would concentrate on the Bozhong 19-6 area and the Bozhong Depression.

CNOOC added that it was also pursuing an onshore unconventional natural gas programme to target 100 billion cubic metres of resources.

“We will actively promote the integration of exploration and development to increase resources in the Shenfu area,” explained CNOOC, referring to the onshore oil and gas located in the Shaanxi province of northwest China.

Spending

CNOOC’s net production target is between 650 million and 660M barrels of oil equivalent of which production from China will account for 70 percent and overseas resources would provide 30 percent.

Net production is also forecast to reach 690M to 700M Boe in 2024 and 730M to 740M BOE in 2025.

The company’s total capital expenditure for 2023 is budgeted at between 100 billion Chinese yuan ($14.75Bln) and 110Bln yuan ($16.23Bln), of which, capital expenditures for exploration, development, production will account for 18 percent, 59 percent and 21 percent respectively and 2 percent will go on administration.

Analysts said the robust programme suggested continued expansion of the economy in China through 2023 after the Covid-19 restrictions were lifted.

Nine new projects are planned to be brought on stream in 2023, including the Bozhong 19-6 gas field Phase I development in China and two oil fields at Lufeng 12-3 and Enping 18-6.

Overseas projects coming on stream include three developments in South America, the Payara Project in Guyana and the Buzios 5 and Mero 2 projects in Brazil.

The company said it continued to promote greener, lower-carbon developments and is expanding renewables, including its offshore wind project in Hainan, providing an additional 500 million kilowatt hours per annum to the power grid.

For shareholders, CNOOC said it expected to continue its annual dividend pay-out to investors through 2024 of “no less than” Hong Kong dollars $0.70 (US$0.09).

“In the coming year, CNOOC will continue to seek progress while delivering a stable performance,” said Chief Executive Zhou Xinhuai.

“The company will vigorously implement the three major programs of reserves and production augmentation, technological innovation and the green energy transition,” added Zhou.

China National Offshore Oil Corp., one of China’s main LNG importers, said its newly discovered Bozhong 13-2 oil and natural gas field in the Bohai Sea offshore northeast China could prove to be one of nation’s largest resource basins and will be subject to fast-track development.