Husky's major gas find signals promise
By Richard Fu |
February 10, 2010, Wednesday
|
Print Edition
Print Edition
CNOOC Ltd's Canadian partner Husky Energy Inc has made a major gas discovery in a shared block in the South China Sea, confirming the area's prospects.
The Liuhua 29-1 find is the third deepwater gas discovery made on Block 29/26, following Liwan 3-1 in June 2006 and Liuhua 34-2 in December last year.
Given their proximity to each other, Husky anticipated Liwan 3-1 and Liuhua 34-2 to be developed in parallel and both fields are expected to produce gas in 2013. The latest Liuhua 29-1 filed will be appraised later this year, and could utilize the Liwan field infrastructure.
The well tested natural gas at an equipment-restricted rate of 57 million cubic feet per day, with indications that future deliveries of the well could exceed 90 million cubic feet, Husky said.
Under their sharing contract, CNOOC has the right to participate in up to 51 percent working interest in any commercial discoveries on the block.
Mirae Asset Securities analyst Gordon Kwan estimated the three deepwater discoveries could potentially lift CNOOC's overall proven reserves by about 200 million barrels of oil equivalent, or about 8 percent of its current reserve base, assuming a conservative 50 percent recovery efficiency for gas projects and a 50 percent share for CNOOC.
John C. S. Lau, Husky's president and CEO, said the three fields confirmed the resource potential as a major gas development project in the South China Sea and supports earlier estimates of 4 to 6 trillion cubic feet of gas for the block.
Goldman Sachs said in a note that more potential discoveries are possible in the area given that companies like Devon Energy Corp, Anadarko Petroleum Corp and BG Group are planning to drill there.
The Liuhua 29-1 find is the third deepwater gas discovery made on Block 29/26, following Liwan 3-1 in June 2006 and Liuhua 34-2 in December last year.
Given their proximity to each other, Husky anticipated Liwan 3-1 and Liuhua 34-2 to be developed in parallel and both fields are expected to produce gas in 2013. The latest Liuhua 29-1 filed will be appraised later this year, and could utilize the Liwan field infrastructure.
The well tested natural gas at an equipment-restricted rate of 57 million cubic feet per day, with indications that future deliveries of the well could exceed 90 million cubic feet, Husky said.
Under their sharing contract, CNOOC has the right to participate in up to 51 percent working interest in any commercial discoveries on the block.
Mirae Asset Securities analyst Gordon Kwan estimated the three deepwater discoveries could potentially lift CNOOC's overall proven reserves by about 200 million barrels of oil equivalent, or about 8 percent of its current reserve base, assuming a conservative 50 percent recovery efficiency for gas projects and a 50 percent share for CNOOC.
John C. S. Lau, Husky's president and CEO, said the three fields confirmed the resource potential as a major gas development project in the South China Sea and supports earlier estimates of 4 to 6 trillion cubic feet of gas for the block.
Goldman Sachs said in a note that more potential discoveries are possible in the area given that companies like Devon Energy Corp, Anadarko Petroleum Corp and BG Group are planning to drill there.
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