China's CNOOC announces 100 MT oilfield discovery in South China Sea

Chinese state-owned oil and gas giant China National Offshore Oil Corporation (CNOOC) on Friday announced it has made a major oilfield discovery in the deep-water deep-play of the South China Sea.

The Kaiping South Oilfield is located in the eastern South China Sea, with an average water depth of approximately 500 metres. The new reserve will add at least 100 million tons of oil equivalent proved in-place volume and marks a landmark discovery for the nation. The main oil-bearing plays are Zhuhai Formation, Enping Formation and Wenchang Formation of Paleogene, and the oil property is light crude.

CNOOC said the discovery well KP18-1-1d was drilled and completed at a depth of 3,462 metres, which encountered a total of 100.6 metres oil and gas pay zones. The company said the well was tested to produce an average of approximately 7,680 barrels of crude oil and 0.52 million cubic feet of natural gas per day. Through continued exploration, the proved in-place volume of Kaiping South Oilfield, in the Pearl River Delta near Guangdong province, has reached 102 million tons of oil equivalent.

Discovery is an oilfield landmark for China

Xu Changgui, CNOOC Deputy Chief Exploration Officer, said: “Kaiping South Oilfield is China’s first deep-water and deep-play oilfield with proved in-place volume over 100 million tons. The discovery fully demonstrates the broad prospects for exploration in deep-water South China Sea, and further expands the resource base for the company’s high-quality development.”

CNOOC has invested heavily in developing China’s offshore oil and gas reserves as part of a broader push to offset declining output from existing aging onshore fields. The company lifted its 2024 production target by about 8% to a record 700 million-720 million barrels of oil equivalent. Much of the domestic production is in offshore reserves in eastern China’s Bohai Sea and the South China Sea.

Zhou Xinhuai, CEO and President of CNOOC, said: “In recent years, CNOOC Limited has achieved remarkable breakthroughs in oil and gas exploration in the eastern South China Sea, building a new growth pole for offshore oil and gas production. The company remains committed to oil and gas resources exploration and development in the South China Sea, thereby continuously enhancing its energy supply capacity.”

CNOOC is the largest offshore oil and gas producer in China. It was established as a state-owned mega company, with the approval of the State Council, on February 15, 1982. The US Energy Information Agency (EIA) estimates that the South China Sea holds about 190 trillion cubic feet of natural gas and 11 billion barrels of oil in proved and probable reserves, most of which lie along the margins of the South China Sea.