China's Ministry of Land and Resources has confirmed the discovery of huge
natural gas reserves in South China Sea.
In a circular released on Thursday, the ministry announced the discovery of
natural gas reserves exceeding 100 billion cubic meters in a prospect well named
LW3-1-1.
It may be the largest offshore natural gas discovery ever made in China, said
the ministry.
The discovery is also one of the several great oil and gas discoveries ever
made in the first six months of 2006 around the world, said Ian Cross, vice
president of International Petroleum Information, IHS, a famous global
technological information provider.
Located at the Pearl River Mouth Basin 250 kilometers from Hong Kong,
LW3-1-1, drilled at a depth of 1,480 meters, is China's first deepwater well
with a drilling depth of more than 1,000 meters.
The "important" discovery showed the huge potential reserves of oil and gas
in South China Sea, the ministry said.
The ministry's announcement confirmed the natural gas discovery made by
Canada-listed Husky Energy Inc, the operator of the prospect well.
Husky estimated last month that LW3-1-1, the first prospect well drilled at
the production sharing contract (PSC) block with the China National Offshore Oil
Corporation (CNOOC), China's largest offshore oil producer, contains a potential
recoverable reserve of four to six trillion cubic feet (113 to 170 billion cubic
meters) of natural gas.
Following the Husky news release, the China National Offshore Oil Company
Limited (CNOOC Ltd), a 70.64 percent held subsidiary of CNOOC, saw a 12-percent
rise of its share price on the Hong Kong Exchanges and Clearing Limited (HKEx)
over two days.
Four days after Husky's announcement, however, a statement released by CNOOC
Ltd on the HKEx said the discovery needed further evaluation and governmental
confirmation.
China launched its strategic exploration and appraisal of potential oil and
gas reserves in the northern part of South China Sea in 2004.
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