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China National Offshore Oil Corporation (CNOOC) said on Sunday it had started oil production from the Liuhua 16-2 oilfield cluster in the Eastern South China Sea, which is expected to reach peak production of around 72,800 barrels of crude oil per day in 2022.
As part of the project, CNOOC plans to put into production and development a total of 26 wells via a floating production storage and offloading (FPSO) and three underwater production systems, the Chinese offshore oil giant said.
The Eastern South China Sea is one of CNOOC’s most important crude oil and natural gas producing areas, where crude is mostly of light to medium gravity.
As of the end of 2019, the reserves and production in Eastern South China Sea reached 633.9 million BOE and 242,026 BOE/day, respectively, accounting for 12.2 percent of the company’s total reserves and approximately 17.4 percent of its production, CNOOC says.
Earlier this year, CNOOC said it had made a significant discovery of oil and natural gas in the eastern part of the South China Sea.
A discovery well at the Huizhou 26-6 discovery in the Pearl River Mouth Basin in the Eastern South China Sea was tested to produce around 2,020 barrels of oil and 15.36 million cubic feet of gas per day.
CNOOC expects the new oilfield to become the first mid-to-large sized condensate oil and gas field in the shallow water area of Pearl River Mouth Basin.
CNOOC’s new discovery could be a boon to China’s ambitions to boost its domestic oil and natural gas production in an attempt to lessen its dependence on oil and gas imports. State-controlled CNOOC is one of the companies that China has tasked with replacing domestic reserves, even as the oil price crash has forced Chinese state oil majors to cut capital expenditures for this year.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com