CNOOC Makes First Ultra-Deepwater Gas Discovery in South China Sea

Chinese state-owned energy company CNOOC has made the first ultra-deepwater gas find in the South China Sea. The well produced 430,000 cubic meters per day in an open flow test, making it a major find and a groundbreaking development for the Pearl River Mouth Basin. 

The well was drilled in the Baiyn Sag, about 150 nautical miles to the south of Shenzhen. (This area is within China's legal exclusive economic zone and is uncontested, unlike many other oil and gas-rich regions of the South China Sea.) The drilling crew found a gas pay zone about 650 meters long in a well of about 4,400 meters in depth. 

"Previously, exploration in China's ultra-deepwater areas mainly focused on clastic rocks. The success of this well has, for the first time, revealed the enormous potential of carbonate rocks in China's ultra-deep waters, marking significant breakthroughs in both exploration understanding and operational techniques," said CNOOC chief geologist Xu Changgui. 

The new find is located next to existing production facilities for another field, so a tieback arrangement could be used to economically develop the new well. 

It is the second major discovery that CNOOC has announced in a matter of months. In June, the company hit a major find at the Lingshui 36-1 reservoir, which proved to contain more than 100 billion cubic meters (3.5 trillion cubic feet) of natural gas. It is an ultra-shallow field in ultra-deep water - the first field of this kind in the world - and the gas layer lies just 200 meters below the seabed in 1,500 meters of water. Testing showed that it could produce up to 10 million cubic meters per day. 

The company's recent success occurs under new leadership. Former general manager Li Yong retired in December 2023, and the powerful Central Commission for Discipline Inspection began examining his record three months later. On Wednesday, the commission announced that Li had been expelled from the party for alleged misconduct, including accepting bribes, trading power for money, maintaining ties with "unscrupulous businessmen," misusing his position for personal gain, and "engaging in activities that could compromise the impartial execution of official duties." He had worked at state-owned oil companies since 1984, including three years as head of CNOOC.