HOUSTON, July 27 -- Husky Oil China Ltd., a subsidiary of Husky Energy Inc., Calgary, signed a contract to explore Wenchang Block 39-05 in the Pearl River basin of South China Sea.
Husky will drill three exploration wells in the block, 100 km off Hainan Island, over 7 years, starting in 2002. During the exploration period, the company will own 100% interest in the block.
China National Offshore Oil Corp. will have the right to participate in development programs with a 51% interest, while Husky would own the remainder.
Block 39-05 covers 5,700 sq km. Seismic surveys have already been done.
"This project is consistent with Husky's upstream strategy," said John C.S. Lau, president and CEO of Husky Energy Inc. "Our upstream projects reflect a diverse, high quality asset base providing strong production and reserves growth. This exploration block, with contiguous discoveries, will provide an excellent opportunity to grow our offshore production, following successful development of the Wenchang 13-1 and 13-2 fields."
The block is near unappraised discoveries made by CNOOC for which Husky has obtained the right to participate in development, said Husky, which said it will try to tie those discoveries into the Wenchang 13-1 and 13-2 field developments now in progress.
CNOOC operates those developments, which are expected to come on stream during the first half; Husky owns 40%.