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China National Offshore Oil Corporation (CNOOC) has signed strategic cooperation agreements for oil and gas exploration offshore China with nine international companies including oil majors Chevron, ConocoPhillips, Shell, Total, and Equinor.
CNOOC and the nine companies—Chevron, ConocoPhillips, Equinor, Husky, KUFPEC, Roc Oil, Shell, SK Innovation, and Total—will share development opportunities in strategic cooperation areas located in the Pearl River Mouth Basin offshore China, CNOOC’s exploration and production company CNOOC Limited said in a statement on Tuesday.
“The agreements will facilitate the establishment of a long term and stable cooperation and share the development opportunities to a certain extent in the Strategic Cooperation Areas, creating conditions for the final signing of contracts,” CNOOC said.
Chinese companies are trying to tap more resources at home to replace dwindling production at mature oil and gas fields while China’s oil and gas demand continues to grow.
Earlier this year, China National Petroleum Corporation (CNPC) advanced a strategic partnership with Brazil’s Petrobras and agreed to cooperate with Norway’s Equinor in oil and gas projects, in a push to boost its global footprint and Chinese gas production.
China’s biggest energy producers are tapping more tight oil and gas wells, aiming to increase domestic oil and natural gas production at the world’s largest crude oil importer and what will soon be the world’s top natural gas importer.
As part of a government push to boost domestic energy supply, CNPC and Sinopec are raising investments to increase local oil and gas production and are accelerating drilling at tight oil and gas formations in western China. Domestic natural gas production has been rising in recent months, but the growth rate hasn’t been even close to meeting the booming demand due to the cleaner-fuel/cleaner-air government policies.
Domestic oil production, on the other hand, has been falling due to the depletion of mature conventional oil fields. Desperate to meet this need, Chinese President Xi Jinping has ordered the state-held companies to boost domestic production of oil and gas, and firms are starting to follow the policy.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.