‘Large-scale’ transformation of reserves from trillion-cubic-meter gas region into usable energy production brings new project online in Chinese waters

Chinese state-owned oil and gas giant China National Offshore Oil Corporation (CNOOC) has started production from a natural gas project in the South China Sea, where the firm recently confirmed the total proved gas in place exceeded one trillion cubic meters.

CNOOC’s Shenhai-1 Phase II natural gas development project, which is now online, is located in the Qiongdongnan Basin, northern South China Sea, within an average water depth of approximately 900 meters. The Chinese giant is the operator of this project and holds 100% interest in it.

Wang Dongjin, CNOOC’s Chairman, commented: “The project has successfully overcome the world-class challenge of deep-water high-pressure oil and gas reservoir development. It witnesses effective large-scale conversion of reserves into production from the ‘South China Sea trillion-cubic-meters-level gas region’, and provides stable supply of clean energy for the economic and social development of South China. “

Since hydrocarbon reserves represent discovered quantities of crude oil and natural gas that can be extracted and profitably produced from a reservoir with existing technologies, CNOOC has laid the groundwork for the production of reserves at its latest project, where its main production facilities entail a new fixed production platform and three centralized subsea wellheads, with 12 development wells planned to be commissioned.

“In the future, CNOOC Limited will accelerate the development of new quality productivity of marine energy, and strengthen the exploration and development of deep-water oil and gas resources, thereby further contributing to the high-quality development of China’s offshore oil industry,” highlighted Dongjin.

The Chinese energy player has disclosed that its Shenhai-1 Phase II project is anticipated to reach peak production of 162 million cubic feet of natural gas and 3,931 barrels of condensate per day next year.

The start-up of production at the gas project in the South China Sea comes a week after CNOOC brought online an oil project off the coast of China, equipped with a platform and floating production, storage, and offloading (FPSO) unit as part of the revitalization efforts undertaken at old deepwater oil fields to ensure the country’s energy security.

The Chinese giant has made a string of discoveries recently, including a natural gas one, which is said to mark the first major exploration breakthrough in ultra-deepwater carbonate rocks off the coast of China.

This discovery follows the one the firm confirmed in ultra-shallow gas play in the ultra-deepwater of the South China Sea. The ramp-up in offshore drilling is aligned with the company’s business strategy and development plan for 2024.