Kerr-McGee China Petroleum Ltd., a wholly owned affiliate of Kerr-McGee Corp. has signed a production sharing contract with China National Offshore Oil Corp. (CNOOC) for block 43/11, which covers 2.4 million undeveloped acres in the South China Sea.
Under the contract, Kerr-McGee holds a 100% foreign contractor's interest in the first phase of the exploration period. CNOOC has the right to participate with up to a 51% interest if Kerr-McGee enters into the development phase.
Block 43/11 is 220 mi southeast of Hong Kong, in 5,000-10,000 ft.
"This contract allows us to leverage our deepwater expertise and build on our long-standing relationship with CNOOC, as we explore the proven hydrocarbon basins of the deepwater South China Sea," says Dave Hager, Kerr-McGee senior vice president responsible for oil and gas exploration and production. "As the largest US-based independent producer in the deepwater GoM, we have developed expertise, technology, and cost advantages that we can utilize as we explore for new energy resources in this area."
This is Kerr-McGee's first deepwater exploration contract with CNOOC. It more than doubles the company's acreage in China to 4.1 million acres.
"Our success in China is marked by eight discoveries in Bohai Bay and the development of two fields that came online in July 2004, within budget and five months ahead of schedule," said Michael Verm, vice president of Kerr-McGee's China operations. "These achievements were the result of teamwork, commitment, and sharing of expertise, and we look forward to building on our China success in our new endeavors with CNOOC."
In Bohai Bay, production from Kerr-McGee-operated CFD 11-1 and CFD 11-2 fields on block 04/36 currently ranges from 40,000 to 45,000 b/d. The two fields were developed using platform wells producing to an FPSO. Development of the Kerr-McGee-operated CFD 11-3 and CFD 11-5 fields on block 04/36 is in the final approval stages for development. Kerr-McGee holds an 82% predevelopment foreign contractor's interest in these fields.
02/04/05
